Pricing your rental property correctly is both an art and a science. Price too high and your property sits vacant; price too low and you leave money on the table. Here's how to find the sweet spot.
The True Cost of Vacancy
Before diving into pricing strategies, understand what vacancy really costs:
Example: $4,000/month Property
Overpricing by $200/month:
If overpricing causes 1 extra month of vacancy, you lose $4,000 to gain only $2,400 over the year ($200 × 12). Net loss: $1,600
Competitive pricing:
Rent quickly at market rate = full occupancy. Sometimes pricing $50-100 below comparable properties fills units faster and yields better annual returns.
The Comparable Analysis Method
Professional property managers use comparable analysis ("comps") to determine market rent:
Step 1: Find Similar Properties
Search for rentals within 1 mile of your property with similar:
- Bedroom and bathroom count
- Square footage (within 15%)
- Property type (SFH, condo, apartment)
- Age and condition
- Amenities (garage, A/C, updated kitchen)
Step 2: Adjust for Differences
Add or subtract value for key differences:
Add Value For:
- +$50-100: In-unit washer/dryer
- +$50-150: Garage parking
- +$100-200: Updated kitchen/bath
- +$50-100: Pet-friendly
- +$100-300: Premium school district
Subtract Value For:
- -$50-100: Street parking only
- -$100-200: Dated finishes
- -$50-100: No A/C
- -$50-150: Busy street location
- -$100-200: No outdoor space
Step 3: Check Days on Market
If comparable properties are renting within 2 weeks, the market can likely support slightly higher rents. If properties are sitting for 30+ days, pricing may be too aggressive.
Seasonal Pricing Considerations
Rental demand fluctuates throughout the year:
- Peak Season (May-August): Families move before school starts. You can price at or slightly above market.
- Fall (Sep-Nov): Demand decreases. Consider pricing competitively to avoid winter vacancy.
- Winter (Dec-Feb): Slowest period. May need to price 5-10% below peak to attract tenants.
Common Pricing Mistakes
- Pricing based on mortgage: What you owe has nothing to do with market rent. Price based on comparables.
- Emotional attachment: Your memories don't add value to tenants. Be objective.
- Ignoring vacancy cost: An extra month empty costs more than $100/month below market.
Get Expert Pricing Analysis
Our team analyzes hundreds of comparable properties to determine optimal pricing for your rental. We track real-time market data to keep you competitive.
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