The Miami-Fort Lauderdale metro area ranks among the top 10 most expensive rents in the US. This can make it enticing to invest in rental property in Fort Lauderdale. However, once you purchase your investment property, you have an important decision.
How much should the rent be for your new rental property? Make the most of your investment by doing your due diligence. Considering these factors will help you determine the best rent for your property.
Market Value
As a general rule, if you want to make rental income, the rent should be between 0.8% and 1.1% of the home's value. This ensures that your real estate investment generates enough income to make renting worthwhile.
However, you cannot determine the rent in a vacuum. If the home's market value is high, you may need to lower the rent. Otherwise, the market value calculation could price you out of the market.
In addition, you may want to consider your monthly mortgage bill. Consider charging a rent that will cover the mortgage so that you don't have to reach into your pocket.
Comparable Homes
Once you figure out your market value rent, your next step is to look at comparable rent homes already on the market. Look for homes that are in the same community or neighborhood. They should have a similar square footage and amenities.
Look at homes currently on the market and those that recently went off the market. This will tell you what other rental property owners are asking for and what homes are successfully renting for. A property manager can help you pull this information.
Unique and In-Demand Features
Rental homes with something extra or different can charge more for rent. Tenants will pay more for rent if they feel like they get more for their money.
- Swimming pool
- Washer and dryer
- Extra storage
- Hardwood flooring
- Granite countertops
- High-end fixtures
- Stainless steel appliances
If your rental home does not have any of these features, you could make a plan to add them. Investing money into the rental home can help you increase the rent and the overall home value.
Market Conditions
Rental prices seem to have risen at an out-of-control pace over recent years. However, real estate markets go up and down. So if you ignore market conditions, you could miss the recent slowing of growth in the Fort Lauderdale market.
You will struggle to rent the property if your rent is too high. Conversely, you miss out on potential income if your rent is too low.
Look at the historical trend of the local rental market. This will tell you if rental rates are on the rise or fall.
Price Your Rental Property
With these tips, you should be able to accurately price your rental property. However, if you find yourself struggling, then it is helpful to seek out the assistance of a rental property company. An experienced property manager can help you determine the best rent for your investment property.
Contact our experienced property managers and let them help you determine the correct rental price for your rental property.
