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Property owners may rent out their unit for a multitude of reasons. It could be that they’re moving away from Westchester or are professional investors.
Property owners will need to price their property appropriately to enjoy all the perks that come with rental property ownership.
Rental pricing is not an arbitrary figure that you just pluck out of the air. It has an impact on the viability of renting over the long term and also on your finances.
To guide you, the team from Librett Real Estate Group has put together this article for Westchester homeowners looking for a comprehensive guide on rental pricing.
Property Pricing Considerations
As a property owner, you have an advantage since you hold an asset that is very much in demand. This should be wielded with some considerations in mind. You can’t just place any figure on your rental property when advertising it.
In this section, we’ve provided various factors that you should consider when pricing your Westchester property.
Competition Analysis
The local property market is made up of several players, including other landlords with similar units to yours.
It would be prudent to assess your competition in the neighborhood. What are similar units in the neighborhood being leased for? Do they offer similar amenities to mine?
When performing a competition analysis, you should be on the lookout for the no. of bedrooms, no. of bathrooms, and the built-up area. Other stand-out features that you should keep an eye out for are parking, washer/dryer, appliances, and extra storage.
From our experience in the Westchester area, these are desirable amenities that will have an impact on the appropriate pricing.
Local Market Performance
For you to properly price your unit, you need to have your ears to the ground. How is the property market performing? Is there an oversupply of available units in the area? Or is the demand too high?
The ideal situation for any landlord is where the demand for housing is high. Here, you are able to charge a premium, especially if your space is in a good location.
On the flip side, you have a renter’s market where the supply is higher than the demand. In such a scenario, you would have to offer discounts to be able to secure a good tenant for the long-term.
Another question that property owners might have is where to get such information. Property journal sites are available with regular publications.
Also, companies release localized reports that summarize the performance of various sub-markets. These publications should give you an indication of how the market is performing and where it is headed.
Expenses
Owning an investment property is similar to running a business. You must ensure that you’re running a profitable venture or at least breaking even as the market improves. Your future expectations should be to always have a positive return.
A key determinant is your expenses. Due to the property cost associated, you most likely will have to cover mortgage payment costs. There is also management, regular maintenance costs, renovations, taxation, insurance, and a small percentage for miscellaneous costs.
Should you find yourself unable to cover these costs from your rent, it’s time that you reevaluate your pricing. Some property owners find it hard to perform the market analysis due to its intensive nature and requirement for property technical expertise.
At such a time, you can rely on an experienced property consultant with local experience who can guide you on the subject.
What Has an Impact on Rental Value?
What are potential tenants looking for? What is their consideration when choosing the ideal property? The following are what tenants typically consider when renting a property:
- Location: The old mantra of ‘location, location, location’ holds. Properties near public, social, and entertainment areas, as well as amenities can attract higher rent.
- Curb Appeal: Some landlords neglect how their properties look from the outside. Our experience reveals that tenants are very conscious of how an apartment looks from the outside. Upgrading your property’s curb appeal could give you the edge you need in your neighborhood.
- Appliances and Amenities: Splurge a little when it comes to the appliances in your building. Appliances will give your property a more modern look and are guaranteed to work more efficiently and last longer.
- Pet Policies: Don’t underestimate the number of tenants owning pets nowadays. Being pet friendly would attract more tenants your way. You can charge a higher fee for the pet due to pet rent or pet security deposits.
How to Know if Your Pricing Is Off
Either due to lack of knowledge or some other factor, you might inappropriately price your Westchester residental or commercial property. There will be two major signs that will indicate that your pricing is off:
- Long Vacancy Periods: Since you’re in a competitive market, tenants will find themselves attracted to similar properties offering better rental pricing. This will, of course, lead to several months of lost rent.
- Inability to Meet Property Costs: This happens when you’ve priced your property lower than the market price. As mentioned earlier, you’ll find yourself unable to meet the costs of your property. You might have to dip into your other financial streams to cover these costs.
Conclusion
The goal of appropriate and accurate rental pricing is to be able to attract long-term tenants while being able to cover your property costs. Analysis of market trends and tenant preferences should guide you on how to price your property.
In addition, adapt different pricing strategies depending on the position of your local market.
For property owners looking for help to price their Westchester County property, you can rely on a leading property agent in the area for professional guidance. Librett Real Estate Group is a full-service property management company with years of experience in the local market.
Our experienced and expert team knows the ins and outs of the Winchester market. We can help you implement the best pricing strategy and also get the best out of your Winchester rental. Contact us today!
