Determining the right rental price for your investment property can be quite difficult to do without the knowledge and experience of a property manager that understands the rental market. Setting a price isn't a simple mathematic equation as so many different factors establish the right rental price that maximises your returns but also isn't too out of range for potential tenants.
The key elements that contribute to setting the right rental price:
Location:
Whether your property has harbour views, is near schools and public transport, or located in a quiet street in a family-friendly suburb, property location has a significant impact on the amount of rent you can charge. Sought after locations with low demand will also give you the advantage to price your property at the higher end of the market scale.
Size and Features:
In addition, when deciding the amount to charge for your future tenant, ensure that you are also comparing your property to those also in your area, this is referred to as 'direct comparison'. This includes comparing your property with current properties for rent and recently leased properties by the number of bedrooms, bathrooms, age of the property, amenities, street and interior appeal and lot size. Through this analysis of the current local market, you can find the right balance of value for tenants and profits from your investment.
Expenses and Cashflow
Although you may want to set your rental price below the market value to ensure more demand on your property and to keep vacancy to a minimum, you will also need to consider your monthly expenses and any other unforeseen payments needed as well. Some of the main costs to consider:
Landlord Insurance
Property Management Fees
Strata Fees: if your property is part of an apartment block or townhouse complex
Interest on Home Loan Repayments
Council and Water Rates
Land Tax
Repairs and Maintenance
It's vital to make sure that you can afford to maintain your mortgage repayment over time and make allowance for repairs, maintenance, and improvements to the property. A budget plan will confirm that you are not charging too little to your tenants, as you may find that your total expenses are more than your rental income.
Utilising a Property Management Agency:
Are you still unsure where to start on your property investment journey and wonder what your property is worth in the current rental market?
Just like each property is different so are the needs of our clients. Our highly qualified Newcastle property managers are simply the best at what they do. If you would like an expert opinion on the current value of your investment and an up-to-date report on recent comparable rental prices, complete an appraisal request and our specialist investment team will assist with your needs. https://c21novocastrian.com.au/rental-appraisalc21novocastrian.com.au/rental-appraisal
Have more questions about your Newcastle investment property? Want to ensure you are maximising your returns? Why not see for yourselves the difference a dedicated team of property managers makes? For a free copy of our Property Investors Guide or for an obligation-free chat, email our Director, Casey Healey on casey@c21newcastle.com.au or phone 02 4928 7400 today.