At CREC we understand that determining a rental price can be challenging. If your rent is too high, your property risks sitting vacant. If your rent is too low, the risk of being cash flow negative is additionally alarming. Setting a fair market rate will make it easier to quickly attract qualified tenants and keep your vacancy loss at near zero. Your rental rate should be profitable for your Charleston property, but also competitively priced to attract good tenants who will want to renew their lease year after year!
Learn the Local Market
Spend time getting to know the neighborhood you invested in. Learn the local market by researching on your own, with a friend who lives locally, or a property manager that has an insider perspective and expertise on the area. Rent costs continue to rise yearly in almost all of the nation’s largest markets, including Charleston, South Carolina.
Compare Rental Properties
Investigate what other places are charging for similar properties and use this as your starting point. It’s important to adjust the price of your rent based on what you might uncover. For example, does your property have better amenities or parking options? There are lots of variants in the equation that can place your property above or below others in the market, so pay close attention!
Calculate Operating Costs
Your property is an investment, and if you’re unable to cover all the expenses for your property with the rental income then you haven’t set the right rent price. Calculate how much you need to pay in mortgage and add all the extra expenses you may face. This could include taxes, property management fees, and potential vacancy costs for tenant turnover. Ideally you want at least 5% of your gross monthly income to be profit, and setting the right price will help maximize profits.
Find Out The Demand For Rental Properties In Your Area
Several factories play into the demand for rental properties, including the national and local economic situation, the desirability of the neighborhood, and the number of units available. It’s important to take note that certain seasons are more desirable than others to move, and there is typically a spike in demand during the spring or summer.
CREC hopes these tips will help make determining a fair rent price easier to navigate. Still unsure of what to charge? Let us do the heavy lifting and help you negotiate. Reach out to us today with any questions at (843) 574-9100 or email us at [email protected].