How to Competitively Price Your Rental Property

How to Competitively Price Your Rental Property - Article Banner

What do you think your Palm Springs rental property is worth to tenants? 

You might have an idea of what you think you should earn in rent every month. But, that’s not always what you’re going to earn. 

You have to be realistic. 

The market will be the dominating factor in how you price your rental property. Right now, rents are pretty high. They have been rising steadily thanks to a competitive market, and that’s great news. But, you have to remain competitive when you’re pricing your property. Otherwise, you’ll find that you actually lose money just by charging more than you should.

The amount you charge and the speed with which you lease your property to a well-qualified tenant will have a huge impact on the amount of money you earn. 

Our understanding of the local rental market and our ability to access excellent data on what homes are currently renting for will help you competitively price your rental property.

Competitive Pricing Leads to Lower Vacancy Loss

It’s hard to strategize how you price your home when you’re too attached to a specific amount. Let’s say you have studied the market and you know that homes like yours in the specific Palm Springs neighborhood where your property is located are renting for at least $2,500. 

With that data, you can use your targeted rental price to determine where and how you advertise the home, and how long you can expect to wait until you find a qualified tenant. 

But, if the home has already been on the market and vacant for a month or longer, you may want to move the leasing process along a little faster. You’ll need to rent your property immediately, so you may take a different approach to pricing. You’ll want to be more aggressive with your rental price so that you attract qualified tenants faster. Maybe you list that home for $2,375 to avoid even an additional week of vacancy.

Earning higher rents is great. But, if it takes you two or three months to find a qualified tenant who is willing to pay that much rent, you’re going to lose more on you property by allowing it to stay vacant. No rent is coming in at all, and that’s going to cost you more than dropping the price by a hundred dollars.

Follow the Palm Springs Rental Market

Be realistic. Base your pricing expectations on how long it will take to rent the property on the price you’re hoping to charge. You’ll also have to remember that the market largely dictates what you can ask, no matter how committed you are to a specific number. 

Getting help from a Palm Springs property manager can help you settle on a competitive price. We spend a lot of time monitoring the market. When we are marketing your Palm Springs rental property, we’ll report all the leads, showings, and analytics to you so you can see exactly where you stand and what kind of attention your property is attracting as it’s currently priced. 

As we analyze that data, flexibility may be required when it comes to your list price.

We will provide you with recommendations on next steps and strategies based on who is interested in your rental property and whether they are asking for applications. Maybe we’ll field a lot of phone calls, but no one moves forward in scheduling a showing. That tells us that something puts them off between the listing and the application process. Is it the price?

When 20 people call to ask questions about your available property but no one feels like they want to spend the time seeing it, you’ll know the price is probably too high for the market or for the property you’re renting out. 

We can also gather some information if people are willing to see it, but not to rent it. Is the traffic too much? Was the condition not up to par? 

Luckily, adjustments can be made. When you know people are interested in your property but they’re not scheduling showings or filling out applications, you can simply drop your price and expect better results. 

Pricing Considerations: Property Condition and Location

The market drives a lot of what you can charge for rent. 

But, it’s not the only thing.

The condition of your property has a big impact on price, and it also contributes to the overall value of your asset. A well-maintained home will get the attention of great tenants. It will increase in value and allow you to gather more equity. A home that is consistently improved and kept modern and fresh will attract great tenants who are willing to pay higher rents. 

Pay attention to the condition of your property. If it’s not in the best shape, you’re going to have to lower your rent quite a bit or invest in some renovations. 

Location and Palm Springs Rental Values

You might have heard this before: 

Location, Location, Location.

It matters with real estate, and that includes the rental market. Tenants want a home that’s well-located. They want a desirable neighborhood, good schools, easy access to grocery stores and restaurants. That type of location will earn you higher rents than if your property is in a remote location or difficult to reach.

Pets Make Your Property Competitive and Increase what you Earn

Here’s a secret weapon when it comes to pricing: pets. 

Whether or not you allow pets into your property will affect price and the vacancy period. Pet-friendly properties typically rent faster and for more money. Good tenants are always willing to pay:

  • Pet deposits
  • Pet rent
  • Pet fees

Allow PetsYou’ll also have a larger tenant pool when you allow pets and you’ll lose fewer tenants to turnover. Pet owners tend to stay in place longer.  

We’re in a pretty strong rental market right now. Leverage that and earn as much as you can when you’re renting out a Palm Springs Property. Ask for help from a local property manager if you can. We’re here to help. Contact us at Xepco Properties.Â