Among the biggest mistakes that newly-initiated or do-it-yourself landlords in Frisco always make is not realizing how to calculate a fair market rental rate for their property correctly and well. Therefore, so many rental property owners are under-or overestimating how much rent they could be asking for and losing money each month, consequently. This is primarily true as rents continue to rise across the country. If you are not increasing your monthly rent to stay abreast with the market, you leave money on the table. Certainly, identifying how to correctly raise rents, mainly when you have an occupied property, is definitely essential. Though there are lots of helpful hints on how to do it, the first and most relevant tool you ought to know about and utilize is the rental property assessment.
Fair Market Rent
The fair market rent of a property is the rate at which similar properties are renting for in your area. The market rent may be greatly different from place to place and even from one neighborhood to the next, so there are no shortcuts: you need specific and local numbers to calculate correctly.
For a Frisco property, the most vital piece of information you should know to kick off this endeavor is what other landlords in your zone are charging their tenants. You equally have to look at comparable properties, or comps, to be sure that the other rental properties are identical in size and features to yours. To get this data, you’ll need to do some kind of detective work. Check out posted rentals in your vicinity and those advertised in local classifieds.
Or, work with a Frisco property management company such as Real Property Management One Source, which will have a wealth of information for the rental market. With at least three or more comps in hand, calculate the average monthly rent and compare your current rate with the total. You now have the fair market rent for your property!
Regular Rental Property Assessment
Despite that calculating the fair market rent is an important preliminary step, it is only the first action in keeping your rental property profitable. To maximize your monthly cash flows, it’s necessary to re-calculate the fair market rent for your Frisco property at least once a year, which might be even more often if rents are changing very quickly. Over the past few years, a shortage of single-family rental homes has led to rapid increases in rental rates in lots of markets across the country. If you have not recently performed a rental property assessment in your community, contingencies are your rent is too low, and you are missing out on income every month.
But still, it’s not only about the money. There are many solid reasons why property owners fail to raise their rent. Maybe you are uneasy and hesitant that raising your rent will make your rental property harder to lease. Lots of landlords are scared that if the rent is set at the going rate, their rental house won’t be competitive, and they’ll have trouble finding tenants. Or seemingly you are troubled about angering a current tenant, specifically if they have been renting from you for a while. Without a doubt, if your rents haven’t changed for years, there’s a good potentiality that your current tenant is paying a rental rate that is well below what everyone else is paying.
Professional Property Management Pays for Itself
It can be time-consuming and, let’s face it, somewhat nerve-wracking, to have an idea whether or not you are charging the correct amount in rent. Even after carrying out your own market research, you may still have anxieties as regards to raising your rent without losing your tenant. For all of these reasons, having a professional property management company assess your property and set your rental rate may be the choice you need. Landlords usually balk or hesitate before hiring a property manager because of the cost. But really, if you are not charging the right amount of rent, you are already losing far more money than you’d pay someone to manage your property for you. By guaranteeing you have an accurate rental rate and working thoroughly with your tenants, a professional property management company can uphold and help you increase your monthly income and, eventually, pay for itself.
Would you like to know more about what a professional property management company has to offer? Contact us online today or give us a call at 214-960-1612.
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