Posted September 12, 2022 | by Keaton Bessey, Managing Broker, Greater Vancouver Tenant & Property Management Ltd.
This is a great question. Below we break down the process you should follow to price your property accurately.
- What is it rented for now? If this home is currently rented, and it was rented in the last 12-18 months, you already have a good idea as to what it would rent for in most cases. Rent usually increases between 3-5% per year on average, so keep that in mind as a very general understanding of the market.
- What are comparable properties rented for right now? If you have neighbours or friends who are renting a unit in your neighbourhood or building, what are their properties rented for? Depending on how long ago they were rented, this will give you more information about what the market rent is for your property.
- What is comparable? You want to look at number of bedrooms, bathrooms, square footage and age as the main indicators of a comparable property. If the home is more than 10 years old, you also want to check if the homes you're comparing to have been updated recently and are finished similar to yours. With everything else being equal, a freshly renovated home will rent for more than a 10 year old home with original finishings.
- What are other properties asking for rent? Go onto the most popular rental platforms and check. Zumper and Facebook Marketplace are the two most commonly used online platforms to post a rental property online for. You may have to create an account on both platforms to get the good information you're looking for, but its pretty simple and the information is excellent. These platforms can be searched on your desktop, laptop, tablet, or phone and you can filter for certain specifications: bedrooms, bathrooms, asking price, location, pet friendly or not, etc. Once you filter for properties similar to yours you can see what people are asking. The asking price is usually a good indicator of what is available, as from the tenant's perspective, this is the market rent as this is all that is available currently.
- What does a property manager think? Any property management company servicing rental properties should be able to explain to you what your property should rent for or at least provide a range. We provide you with a "suggested asking rent" if you complete an Income Property Assessment (CLICK HERE or visit our WEBSITE) and this number is on average within 3% of the final rental amount once we've placed a tenant. Call around to a couple of companies or fill out their online forms to get an answer on the expected rental rate, and ask the property manager how they know? What have they rented lately that is comparable? Do they have something on the market that is comparable right now? Can they show you the ad? How it marketing going right now?
The above tips will help you market your property at the correct rent so that it rents quickly, but not too quickly, to a prospect you can afford the home.
If you're thinking this now, CLICK HERE to take 2 minutes to fill out our Income Property Assessment form and we can answer this question for you. However, if you're budgeting and looking at options and you want to look for yourself before speaking with property management companies (CLICK HERE for a 15 minute call to walk you through this).
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