As you’re preparing to market and list your San Diego property, you’ll need to consider how much rent to charge. This needs to be included in the listing if you want to narrow your potential resident pool to only qualified applicants.
Instead of throwing out any arbitrary rental value that feels good, take some time to study the market and attach a competitive and profitable rental value to your property. The amount you charge will have a meaningful impact on which residents you attract and how quickly you’ll be able to rent your property out.
If you’re not strategic about pricing, one of two things will likely happen:
You may underprice your rental home. This is a mistake, especially considering California’s rent control laws will only allow you to increase the rent to a certain amount every year.
You may overprice your rental home. This is also a mistake. Good residents are well-informed and they know what the market demands for homes like yours. They won’t be willing to overpay.
Here are some of the things to consider when you’re committed to pricing your San Diego rental property competitively and accurately.
Effectively Pricing Your San Diego Rental Property
Measure your tolerance for vacancy against what you want to earn.
Remember that the market largely dictates what you can ask, no matter how committed you are to a specific number. It does not matter if you want to cover the cost of your mortgage. The market may not allow you to ask that much.
Market is always going to drive your price. Stay competitive by understanding whether it’s a hot rental market or a slow one.
As San Diego property managers, we spend a lot of time monitoring the local market. When we are marketing your San Diego rental property, we’ll share all the data we collect on how many leads our listing attracts, how many showings are scheduled, and how many of those prospects actually applied for your property. These analytics allow us to see exactly where your property stands on the market. If we’re not getting anywhere, we know that a price adjustment might be necessary.
Flexibility is important when you’re competitively pricing your rental property. You don’t want the property to languish on the rental market without any applications or interest. When people aren’t calling for more information or trying to schedule a showing, you have likely priced the home too high and you need to be more competitive.
Access Good Data to Competitively Price your San Diego Rental
You can’t properly price a rental home without good data about the market and the pricing range for similar rental homes in your neighborhood.
As we said, if you market your rental property extensively and no one calls to see it, one of the first suspicions you should have is that the price is too high.
Take a look at what similar homes are renting for.
Get recent rental amounts and find out how long they were available before a lease was signed. You can look at rental amounts posted on sites like Zillow and Zumper, but the data provided by professional San Diego property managers is always more reliable. Most management companies will offer you a free rental analysis, and even if you’re committed to managing your own investment property, getting an idea of how much to charge before you market the property can have a valuable impact on your results.
Factors in San Diego Rental Property Pricing
We’ve established that the rental market has the largest impact on what you’re able to charge for your property.
What else matters?
San Diego Location
Location has an important impact on pricing as well. Your rental value must match where your property happens to be. Good residents will make decisions based on where your home is.
When your property is on a busy street, and there’s no parking, the price needs to reflect that. If it’s in a desirable neighborhood with great schools and a lot of local amenities, you’ll charge more. Residents are willing to pay more when the home is well-located and close to schools, workplaces, restaurants, and entertainment. They want a local grocery store. More remote homes and homes that are in busy, loud, and congested areas, will require a more competitive price.
How can you control the market so that it bends in your favor when it’s time to price your property?
There’s not much you can do about your property’s location, either.
You can, however, control property conditions, and this is where you really have a chance to increase the value of your rental home.
Renters are obviously going to pay more for homes that are well-maintained and offer upgrades and updates that they can’t find elsewhere in similarly priced homes. 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.
Making even small upgrades and updates can make a difference. Fresh paint counts. New flooring will bring in higher rents and better applicants. Consider your appliances and your landscaping. What can make the home more attractive and welcoming? Invest in those improvements. You’ll increase what you earn.
Do pets impact price?
Whether or not you allow pets into your property will also affect your price.
Pet-friendly properties typically rent faster and for more money. Good residents are always willing to pay pet deposits, pet rent, and pet fees in order to move in with their beloved cat or dog. Pet-friendly properties also do a better job of retaining residents, and you’ll earn more money thanks to pet fees and pet rent.
You have to be creative and you have to be competitive. Even in a market where supply is low and demand is high, residents are going to look for value. Set a rental price that will keep your vacancy rate low and your resident pool high.
Want to talk about pricing your San Diego rental home? We’re ready. Contact us at PURE Property Management San Diego Office.