If you've decided to turn your Portland home into a rental, it’s vital to establish the right rent rate next. There are a numer of factors to keep in mind when you go about deciding what price your property can fetch.
Rental analysis should be part of your marketing strategy. You need business acumen and comprehensive property research to determine local market conditions and assign an optimal rent price.
An ideal rent amount for your Portland home is advantageous because it will mean the rental will not sit vacant for long. A lot of prospects will be inquiring.
Setting the rent rate correctly also means you won’t be operating at a loss or markedly low profit. Let’s take a look at some of the relevant factors that matter most when it comes to pricing your unit.
How To Set The Right Rental Price
Perform a Comparative Study
One of the most decisive factors when setting your rent rate includes checking out the competition. You must compare similar properties to your own.
After all, it wouldn't really make sense to base your rental rate on a condo unit when you have a single-family home. Here are specific areas to base your study on:
Assess the rent rate of Portland rental homes in similar neighborhoods. Avoid comparing high-end neighborhoods with mid-level neighborhoods.
The property values of the units you're comparing must be similar so you get a more precise figure. Prices are often driven by location. If it’s a hotspot and has several tourist attractions, rent prices can be higher compared to remote neighborhoods.
If your property is further from the city center, following the rental price of a neighborhood situated in the central part of the city would give you an inflated rent amount.
Number of Rooms
It’s sensible to conclude that the more rooms your Portland home has, the pricier the rent rate it'll be able to fetch.
More rooms means more people can be accommodated, and more space to store personal belongings. More rooms also means more room to move around and perform activities, which relates to a higher standard of living.
It’s vital to compare properties based on how many rooms they offer, as you could miss out on a fair amount of rental income if you priced your 4-room Portland home similar to a 2-room home.
Single-family Homes vs Multi-family Homes
Single-family homes are generally detached and have direct access to the street. They usually have their own utility system and are frequently stand-alone buildings.
On the other hand, multi-family homes are composed of several units that can house several families separately. It’s important to only compare the rent price of single-family homes to one another, and not another type of property.
New Construction Vs Old Construction
If your Portland home is newer, you can price it higher. Why? You don’t have to account for wear and tear. When everything is brand new, tenants will pay a premium to live in a pristine space.
This means you shouldn't follow the rent price of a similar unit that has seen its better years. The price for the older constructed rental will be lower, given that its amenities and furnishings will be older, too.
How to Find Properties for Comparison
Now you have an idea of aspects to compare to assign the rent price for your Portland home, you'll want to learn where you can find these properties for comparison. Below are recommendations:
Check out Portland properties from popular listing sites such as Trulia, Realtor and Zillow.
You can do comparisons and see which rental homes are rented out quickly and which have been posted for several weeks or months already.
You can also opt to do the face-to-face route and meet the landlord who owns a similar property to yours. Attend property showings and inquire how much interest is generated by the rental.
If you attend an open house at which there are many prospective renters, you'll know this landlord has set their rental rate low.
Another alternative is to solicit opinion from different realtors. They have expertise and can size up rental prices for your Portland home in comparison to similar ones in your neighborhood area.
Remember that even two similar properties with the same number of rooms can vary in price.
The reason for this is that one rental home may have high-end amenities in contrast to another one.
For example, if a kitchen has a granite countertop and top-of-the-line appliances, it'll go for a premium. If your competitor has a unit with a laminate countertop and appliances at the lower end, assigning similar rates won't be optimal for you.
Factors In Pricing Your Property
- View: The better the view as good landscaping, the more renters will be willing to pay.
- Property Improvements: The better and newer the furnishing, appliances and amenities, the better the rent price.
- Square Footage: The larger a property is the more you can charge.
- Floor Level: Sometimes units on higher floors of buildings can be rented for a higher rate.
- Extras: Factors such as storage areas, balconies, or convenient parking can warrant higher rent.
Accurate Rent Equates to Profitability
Arriving at the right rental rate means your property expenses—such as mortgage payments, vacancy expenses and maintenance and repair—will be covered by your rental income.
If you find that your units aren't vacant but they aren't generating a suitable return on yourinvestment, it likely means the rental price is not accurate or you’ve paid far too much for your property investment.
More Viewing Requests Signifies Higher Interest
If you only receive a few viewing requests, the rental may be too expensive for prospects.
Make sure that you can justify the rental rate with factors such as nice location, home amenities, and accessibility to the city center, parks, or grocery shops.
Let Market Demand Guide Rent Rates
You should be constantly monitoring and adjusting your Portland properties' rental rates, since the economy constantly fluctuates. If your neighborhood becomes a hotspot area, then it’s sensible to adjust the rent higher.
If the economy is in a downward turn, you can’t price your rental too high or it will be hard to attract your market. You don’t want to be stuck with a rental home that doesn’t make you a penny at all.
If you're looking for help setting the optimal rental rate for your property in the Portland area, get in touch with the team at InterWest. We have extensive experience helping landlords in the area set the ideal rent amount.