If you are about to rent your home in Los Angeles, CA, for the first time, it is very likely to get overwhelmed by the process. One of the most critical aspects of renting a home is to set a perfect rental price that is low enough to attract tenants and high enough to generate profits. But don’t worry if you don’t know how to do that! Our two-step guide will help you decide the right rental price for your home.
Step 1: Do Your Research
When determining the rent rate, you must start with researching and learning about the rents of similar properties around. In other words, look at homes up for lease that is your potential competitors. You can do this in numerous ways, such as:
- Walking or driving around your neighborhood and check out rented homes. Talk to the landlords about what they felt was in more demand by tenants and what amenities are they willing to pay more rent for.
- Browsing online on real estate websites such as Pezzini Luxury Homesto keep a check on the kind of homes that get rented quickly. Are condos more in demand than houses? Do renters prefer complimentary amenities? Do homes with a low price always get rented fast?
- Hiring a real estate agent to get an idea about what can be a tentative smart rent rate to choose. An experienced and expert agent will have a good idea of the rent prices in your area.
When researching, you should consider looking at:
- Properties located in the same town or neighborhood as your rental home. Usually, prices vary in different towns, depending on which one is more desirable than the other.
- Properties that are as big or small as yours. Compare rents of homes with a similar number of, for instance, bedrooms and bathrooms as your home.
- Properties that are for single families and compare them to multifamily homes – and see what your home qualifies as. Normally, single-family homes in Los Angeles tend to have higher rent prices than homes for multiple families.
- Properties that have a similar construction as your home. Tenants are generally willing to pay more for newer homes, even if they are small. If you own an old home, think of how much rent price is set for an old home with a similar size cost in your neighborhood.
Step 2: Adjust Price Based on How Desirable the Home Is
Once you have gathered a reasonable amount of data on how much homes like yours are rented for, you should choose a price ‘range’. To identify this range, set up the lowest rent price that you could afford to set and the highest rent that you aspire to get. The key to deciding the exact amount is to think about how your prospective tenants tend to see your rental property.
You can set the rent price based on:
- The kind of view that it offers. Homes with windows facing a parking lot are often leased on low rents because tenants prefer garden facing homes.
- The number of updated and advanced appliances it has. If you still have the dishwasher from 10 years ago, you are most likely to lose a potential tenant when a house with a new appliance becomes available.
- The size and capacity of your home. Both of these factors go hand in hand. A small house built on a huge land with outdoor space is more likely to attract tenants with a small family, as compared to a small house on a small land.
- The architectural design and layout. A house with a contemporary-style exterior is inevitably going to attract high rent-paying tenants than a railroad-style apartment.
- The extra amenities. Don’t forget to think about what your home has that other similar rental properties don’t. It could range from having an extra bedroom to a fancy basement. Highlight these special features as much as you can so that the potential tenants know that the rent price is justified.
So, What’s the Right Rent?
The right amount of rent can at least cover any expenses that you will have to make on your rental property, such as mortgage payments, maintenance fees, etc. The perfect rent rate is when you set up a price that is market competitive, and it ends up giving you some form of an extra income. Do remember that after renting your home in Los Angeles, CA, you will not see too much profit until some time has passed.