Setting a competitive price for your rental property is a critical part of setting up a successful real estate investment. But how you set this number can be a challenge, especially if you are new landlord.

The right price should attract prospective tenants and generate rental income for the property owner or landlord. But if the price is too high or too low, you may have problems with your investment.

At Peak Residential, we believe there many different considerations you should make before setting your price. Some of these factors are detailed below:

Study the Market

When you study the market, you are looking to compare properties that have qualities similar to yours and have been priced in the market already. These properties can be used to establish a base for your rental rate.



It is critical for a landlord or investor to observe what the competition is doing regarding their rental prices. Here are some aspects of a property you should look to when you’re studying the market:

Neighborhood

Location is one of the most important aspects of generating a rental price. How close it is to amenities, stores and other services can make all the difference to your rental rate.

Number of Rooms

Comparing the number of bedrooms and bathrooms in a property similar of similar size to your Sacramento home can be used to determine what prices to set in yours. Generally, the more rooms and bathrooms you have, the higher the rent you can charge.

Property Type

If your rental home is a single-family home or a multifamily home, it will attract similar prices to those of a similar type.

Property Age

New constructions generally attract higher prices than old constructions and so may be more attractive to prospective tenants as they have had no time to develop any wear and tear.

Where to Find This Information

Now you know what to look when comparing your property to the rest of the market. The next step is knowing where to look:

Online Ads

There are numerous online resources that can be used to effectively find similar properties. Such sites include Zillow, Hotpads, and Trulia who all show property statistics including length of listing and property prices. This can be really helpful when developing a marketing strategy.

In Person

A great way to learn about other properties in the market, is to go to them. Visit local open houses, talk to local realtors, you could even arrange viewing for yourself!

Consult with Professionals

Real Estate professionals such as realtors and property managers can view your Sacramento property to determine what is the correct price is.

Given their industry experience, they could have critical information that can help you set a great price.

Adjust Price According to Amenities

Once you have taken into consideration the local market, you should now consider how your unique amenities could impact the overall rent price. Some of these factors are:

View

Generally, a prospect will prefer a property that looks over a garden or other natural features. So, if your property features a unique view, you should take that into consideration.

Renovations

Units that have undergone renovations or updated their appliances, will generally fetch higher prices than a comparable property that has not been renovated.

Square Footage

Larger properties often go for more than smaller ones. So, if you have a larger property compared to others locally, make sure to take that into consideration.

Calculate Your Profit

You should set your rental home price at a value that will generate enough to cover expenses at a minimum, and then add on a percentage for profit. The revenue generated from rent should cover any mortgage payments, maintenance or repairs and vacancy costs.

Evaluate Market Demand

Rental prices change depending on how the market is acting. So, if the economy is performing poorly, the demand for rental homes may rise as individuals look to rent rather than buy.

The seasons will also affect the rent price as prospective tenants will look for different things at different times. For example, at the start of a school semester you may find families with children searching for properties.   

Bottom Line

At Peak Residential, we are a property management company that focuses on taking care of all the details of your Sacramento rental home. So that you can focus on other activities. Based in the Sacramento area, we make sure to stay experts in rental prices for the area and maintain great rental practices in the area since 1982.

We provide excellent property management services to many property types including single-family homes, duplexes, small apartments, and condominiums. Some of the services we offer include deposit collection, property repairs and maintenance, leasing, tenant screening, and providing detailed financial reports to you.

Contact us today if you’re looking for more information and a quote on our property management services!