You've found the perfect rental property, and the market looks great. But now comes the hard part: setting the right rental rate. If you set it too low, you could face seeing your investment sit empty for months. Set it too high, and you'll lose out on potential profit.
Plus, there are many myths about how to conduct a rental valuation. We're using this guide to dispel some of the most common.
Myth: Prices in the Marlboro Rental Market Always Increase
Each time you have the opportunity to review your rental price, you might expect it to only go in one direction. While it's true that if you look at any rental graph, you will often see an upward trend, zooming in will tell you a different story. Rental valuations always have ups and downs, just as with any other market.
An economic downturn or oversupply of similar properties can impact Maryland rental trends and the price you can command. The takeaway is that you need to conduct research before establishing a valuation, and you shouldn't always expect it to be higher.
Myth: A Great Location Commands the Highest Prices
You'll often hear real estate experts talk about the importance of location. That is true. The location of a property will always shape the rental valuation because sought-after areas have more demand. However, don't make the mistake of thinking this is all that matters.
A dip in demand for rentals because of economic issues will have an impact, even if you are lucky enough to have a property in a prestigious area.
Myth: High Property Pricing Strategies Are Vital for Profits
Again, this myth happens because there is an expected relationship between owning a high-priced property and the money you earn. However, overpriced properties can sometimes struggle to secure a tenant, which impacts occupancy rates and long-term impacts.
Rental valuations are often a careful balance between a price that will give you a healthy profit and a price that attracts plenty of potential tenants. It's a trade-off, so do your research first.
Myth: Rental Valuations Only Happen Once
When you buy an investment property, one of the first steps you'll take is to conduct a rental valuation. But the work doesn't stop there. It's a process you'll need to repeat as the market evolves, especially when advertising for a new tenant.
Myth: Spending Money on a Property Leads to a Higher Rental Valuation
A big upgrade can sometimes help you command a higher price for your rental property, but not always. It depends on what the market wants and how your rental compares to neighboring properties.
Focus on improvements that are sought by your target market if you want to see a return, such as bathroom and kitchen renovations or eco-friendly additions that reduce the running costs of the home.
Getting the Right Rental Valuation for Your Property
Don't take shortcuts when it comes to your rental valuation. It's one of the most crucial ways to set your property business up for success.
PMI EXPerience is a real estate business with a difference. We are one of the leading companies in Marlboro, and our clients value our dedication to customer service and knowledge of the market. Find out more about how we can help you with your rental valuation here.
