One of the biggest challenges for landlords is to decide on appropriate rent for their property. Overcharging can lead to long-term rental vacancies while undercharging leads to less rental income. Therefore, it is important to find that sweet spot where the deal is profitable for you and affordable for your tenants as well.
Among Niche 2020’s best places to live, Arlington is ranked no. 1, based on crime, public schools, job opportunities and local amenities. The current median rental price for apartments has increased by 4% over the last year, reaching $2500. Also, the rent varies according to location, size, and condition of the property.
For example, the average rent for an apartment is between $1493 to $1663 in Dominion Hills, Highland Park, Madison Manor, and $2578 in Arlington - East Falls Church, Williamsburg, and North Rosslyn.
The frequent changes in the rental market due to inflation, demand & supply dynamics, and economic slowdown may influence the rent value of your property as investors tend to be more conservative when it comes to indivisible or illiquid investments in real estate. In such a scenario, knowing current trends in the housing market will help you charge appropriately for your rental property.
Knowing your competition can help you get a better idea of what you should charge. There are several things you can do to understand your local competition, such as visiting the properties that are similar to yours and gathering information about the rent and amenities they provide. Consider the size, location, and the number of bedrooms, storage space, and square footage of those properties.
Ask other landlords about the rent they are charging and the amenities they provide to their tenants. If you want to charge more than the norm, make sure you provide enough facilities to justify your higher rent.
The 1% rule in real estate is used to ensure that rent charged for property is greater or equal to mortgage payment. According to the 1% rule, landlords can charge 1% of their property’s total market value. For example, if the total market value of your property is $700,000, you can charge 1% of $700,000, i.e., $7000 as your annual rent. Make sure you calculate properly before deciding the rent. Overpricing might lead your tenants to lose interest in your rental unit.
As a landlord, you have to consider additional expenses while charging the rent for your Arlington rental property. Your rent should cover monthly payments such as taxes, mortgage, maintenance, property management expenses, and HOA fees (if any). You should earn profit from your monthly rent after spending money on all these expenses.
Economic changes in the country or state significantly affect the rental prices of your property. Therefore, it is essential to keep yourself updated about the frequent economic upswing and the rent prices in the state.
For example, during COVID-19, the world went through drastic economic upheavals. The trend is driven by the decreasing rental prices. The current economic slowdown affected the demand for rental properties. People lost their jobs and couldn’t pay their monthly rents.
Landlords should consider all these factors while charging rent for their properties. Here, a trusted property management company can help a great deal in determining the appropriate rent based on local market trends.
If you are still unsure about how much rent you should charge for your rental, Arlington Realty Property Management can provide an estimate of the rental amount for your property with an in-depth rental market analysis to generate maximum rental income.
For more information,
connect with us at Arlington Realty Property Management.
