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How pricing your rental property correctly matters to maximise your investment and find a tenant!

 

The Australian property market is booming and it’s no surprise, with such low-interest rates on home loans, properties are being snapped up all over the country at a fast rate! If you’ve just purchased an investment property and are preparing it to become a source of income, you are going to want to know how to price it correctly.

Coming up with a price for your property might seem like a simple process but there are a few key elements that go into the determination of the price that you don’t want to miss. 

 

WHY is it important to price your property correctly? 

Working out how much rent to charge on your property has a big impact on the performance of your investment. You want to maximise the income you can earn and increase your return, but at the same time, you don’t want to price the property so that it’s out of range for potential tenants. 

So what other factors make it so important? 

  1. It helps to ensure that you are getting the right tenants and avoid long periods of vacancy 
  2. It ensures you are able to cover your costs 
  3. It helps to maximise your profit!

 

HOW do you determine the right price for your property? 

There are a number of factors that, as a self-managed landlord, you should consider when determining the price to advertise your property for. We take a deep dive and look at the most important ones below.  

 

It’s all about LOCATION!

Where your property is located has a significant impact on the amount of rent you can charge for it. Knowing and understanding the market value for your property and area gives you an advantage as well as knowing how much supply and demand there is.

​​If there is a high demand for properties in your area and limited availability, you’ll likely be able to price your property at the higher end of the scale. If there is a higher supply in your area but not enough demand, then it would be best to revise your strategy to reflect that to attract a tenant.

 

The COMPETITION 

Find out what similar properties in your area are being offered for rent. You can do this simply by conducting a search of one of the main property sites like www.realestate.com.au for comparable properties or you can use our Price Estimator Guide (More on that below).

It’s important to know the going rate and understand what your property has to offer in comparison to others. You don’t want to price your property at a much higher rate than the competition in your area and equally, you also don’t want to price it too low. 

Consider: 

  • What does your property have to offer? 
  • What are its strengths and weaknesses? 
  • Is it close to public transportation? Schools? Shops and Restaurants? 
  • Test the market – attend some open inspections in the area and look at comparable properties online

 

Your COSTS 

It’s a smart idea to take into consideration your monthly costs including your mortgage, costs of any work needed and taxes when deciding the rental rate. While this shouldn’t be the sole factor determining your price, you want to be able to ensure you are covering all your expenses as well as potentially making a profit, depending on where you are at with your investment. 

 

Get an ESTIMATE – Talk to us! 

Do you know about our Price Estimate Report on RentBetter

This handy report helps landlords understand the potential rent for their property and using up to date market data on what to expect when prospective tenants apply for their property. 

Our FREE report includes:

  • Estimated weekly rent, range and yield
  • Median rents in the area over the last 12 months
  • Recent comparative rentals in the area

You can access the report here

 

Pricing Your Property

The Price is RIGHT

Determining the right price for your rental is vital to avoid long periods of vacancy in your property and guarantee that you are making the most of your investment. Knowledge is power – Doing your due diligence to understand the market helps to ensure that you are informed and prepared!

If you’d like to chat about how to optimise your strategy for finding a tenant for your home, get in touch with our friendly team at info@rentbetter.com.au.

 

You can also check out our recent Webinar, hosted by RentBetter CEO, Jeremy Goldschmidt here on ‘How to Price Your Property’:

 

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