How to Tell if Your Rental is Overpriced

When it comes to managing a rental property, it can be difficult to strike a balance between catching a great rental rate and making sure you have the least amount of vacancies possible. Knowing how to tell if your rental is overpriced will allow you to keep your property as productive as possible. If you’re struggling to rent your home, here are some key indicators that your rental may be overpriced:

Constant Requests for Negotiation

It is important to set an educated rental rate and stick to it, adjusting it based on what kind of feedback you receive from the market. If you are constantly receiving inquiries from individuals asking for a lower rental rate, it may mean you are pricing it too high. One or two of these requests are common, but if you notice a pattern or a consistent request for a specific rate, you may be overpriced.

Inquiries or Applicants Who Don’t Follow Through

When you receive an inquiry or an application for your property, it is important to follow up right away. If you are consistent in following up with inquiries and applications, the chances of someone renting your property are higher. 

However, when you begin to see a pattern of inquiries or applicants who don’t follow through, it could mean that your price is too high. If people stop returning your calls, emails, texts, and/or invitations to rent the property, they likely found something else. Many times, that “something else” is a comparable home at a better offer.

Few Inquiries or Applicants

Generally speaking, 20-40 inquiries a week is healthy activity for a rental. Anything less and you may be overpriced; anything more and you may be underpriced. If your home has been on the market for longer than a week and you aren’t seeing much activity, then your rental may be priced too high. That said, it’s important to note that the rental market is constantly shifting based on demand, competition, and the time of year. Shift your prices based on what the market is telling you.

Rental is On the Market for Too Long

Rentals set at the market rate should be on the market for no longer than 21 days. Once your home is available to move into – meaning all necessary repairs are complete and it’s up to a livable standard – then your vacancy should fill relatively quickly. When you begin to see vacancies beyond 21 days of availability, especially if you’re also seeing few inquiries or applications, then your home may be overpriced. 

How to Price Your Rental

Setting a price for your rental can be a difficult task, especially if you don’t have much experience with property management. However, there are some steps you can take to find the right asking price:

• Do your research: Sites like Zillow and Redfin will provide rental estimates based on what is currently on the market, and what has recently rented in your area. This can be a great tool to use, but be careful and make sure to do your own research as well.
• See what others are offering: Use filters on sites like Zillow, Zumper, Redfin, Hotpads, and Trulia to see what other comparable homes in your area are renting for. Pay attention to size, amenities, neighborhood, number of inquiries, and time listed. 
• Experiment with incentives: If you’re having trouble generating interest in your property, consider adding or adjusting the incentives you’re offering. If you’re comfortable, things like pet policies or washers/dryers can make a big difference.
• Listen to the market: While your home is listed, look for signs that your rental is over- or under-priced. Pay attention to the signs listed above, and see how the market responds to changes you make.
• Get professional assistance: Want to get the most out of your rental property? A professional can make it easy. From listing and pricing to managing applicants and choosing tenants, an expert can take the pressure off your shoulders while keeping your property as lucrative as possible. 

Feeling overwhelmed about managing your rental property? At Zenith Properties NW, we understand the challenges that homeowners face, and we can help ease your burden. With seven consecutive Best in Business awards and a reputation for excellence throughout the Clark County WA area, you can trust us to provide hassle-free rental experience from start to finish. To learn more about how we can help, give us a call today!