How Will New Construction Affect Rent & Vacancies in 2014?

The winter months can spmetimes be the toughest months in terms of finding a renter for your rental property. What causes this? Typically there are a few factors that go into what drives the demand.     One major factor is the school year, many families don’t like to move during the school year and having to […]

1. Location Matters In Certain Circumstances : The rent you can ask can change dramatically based on walking/biking proximity to restaurants, entertainment, bars, shopping, parks and schools. Being within a few minutes driving distance typically will not warrant asking a higher rent. Also be aware that typically being within walking/biking distance to a Target or an Applebee's will not persuade a tenant to pay more rent. Tenants are willing to pay more to be closer to downtown, town centers and large parks with a lot of activity going on. If you’re not sure about it, think if you’d be willing to pay more each month on your mortgage for the location. 2. Don’t price your rental price based on square footage : Unlike selling homes where there are average price per square foot, pricing rentals doesn’t work the same way. If you have a 2,000Sqft home and were to price your home at $1 per square foot and ask $2,000/Month and your neighbor has a 3,000 Sq Ft home and is asking $3,000/Month chances are only the lesser priced home will rent. More square footage is always nice, but to a renter it comes down to the usability of that square feet. If there is 500 sq ft in the basement unfinished, the renter can’t use that space, but a buyer could potentially finish that space and use it. What’s more important is the number of bedrooms and bathrooms when determining a rental amount. 3. The time of year is very important : There is a pretty drastic difference between renting your home in the winter and renting your home in the summer. On average May-August are the best months to have your home on the rental market. During these months you have the most renters searching for a new place and you can typically price higher. In the winter months, a lot of tenants will decide to stay put to avoid moving during the holidays, in the cold or in snowy weather. If your home is coming on the market in the winter months be prepared for fewer renters to choose from and expect a lower rental rate. Many renters purposefully choose the off peak months to get a deal. 4. Take your emotions out of it : If you’ve lived in the home you’re trying to rent, you probably have a personal connection to it. You view your home completely differently than a renter will and you will value things that a tenant probably will not. Just because you personally laid the tile in the master bathroom, doesn’t mean a perspective renter is going to like it. The type of Granite you used in the kitchen, the type of windows you have and the cost of the carpeting in the bedroom will have no effect on a renter when they’re making their decision on their next home. 5. The Parking Situation : One of the most important things a renter looks for in a property is parking. A garage or a carport are the first things that come to mind for renters in Colorado, especially when considering the winter months. Having a garage or covered parking will not add much, if any, value to your property in terms of rent. It may make it enticing over other properties, but charging extra for it is not a viable option. Just because apartment communities can charge for parking doesn’t mean you are able to. 6. Utilities : There are many ways to handle utilities when it comes to a rental property. If it is a single family home, usually a renter is responsible for putting all of the utilities in their name and paying them each month. In an attached dwelling with an HOA, typically the HOA dues will cover some utilities such as trash and water.. Owners should always pay the HOA dues and not ask the tenant to pay them. If the HOA does include some of the common utilities it is usually easiest for the owner to pay them. This way you don’t need to spend each month back billing utilities and you can save yourself the headache. You can reflect these included utilities in your rental amount, but keep in mind that when advertising a lot of renters will only see the higher amount and may cross it off their list not realizing the utilities are included. For short term/fully furnished leases it is usually wise to include all utilities in the rental amount and make sure the rent reflects it. Also clearly state it in the title. 7. What Warrants A Higher Rent? : Every renter is different and places value in different aspects of a home. The two most important rooms tenants look at when considering a place and if it is worth the rental amount are Kitchens and Bathrooms. Updated kitchens have a huge effect on the rental price. Tenants love Granite/Stone/Tile Counter-Tops, Stainless Steel Appliances and updated cabinetry and lots of it. When looking at bathrooms, tenants look for clean, bright and updated bathrooms with tile floors. Pouring money into custom paint colors and light fixtures wont translate to a higher rental amount but could entice a tenant to choose your place over another property reducing your vacancy. 8. The Pet Problem : For good reason an owner probably doesn’t want pets in their investment property. They can scratch floors, destroy carpets, leave odors and hair behind, kill lawns and potentially make the home harder to rent or sell in the future. What an owner should keep in mind, is that a lot of renters have pets and saying no to them outright can have a huge effect on the amount of renters looking at your home. Apartment communities typically charge a pet rent of between $25-$50 extra a month. This is an uncommon practice for privately owned rentals and can scare away renters. Your best bet is to ask for a larger deposit to cover any potential damages. Tenants are usually willing to pay a larger deposit and expect it. It is good to note that many pet owners are very conscientious and take better care of the property so don’t automatically rule out a pet. 9. No two homes are the same : Just because your next door neighbor got $1,500/ Month in rent, doesn’t mean that you automatically will as well. Unless the home is a new build, it is going to different than your neighbors. Maybe you re-did the kitchen, moved some walls, finished the basement, remodeled the bathrooms or have more/less bedrooms. It is definitely a good idea to look around online and ask your neighbors about rental rates in the neighborhood because they will certainly give you a good range to work in. But never price your home the same as your neighbors just because they’re next door. That is why you have experts like 8z Rentals to help give you an expert opinion to get your property leased. 10. Know who you’re competing against : Unless you’re in a gated neighborhood or in a small town far from the next town, you’re going to have a lot of competition. Renters have the ability to be flexible and you’re not competing against just your neighborhood when renting your home, you’re competing against surrounding neighborhoods and towns. It could be $500 cheaper a month to live 10 minutes away a town over and a lot of times, a tenant will choose to save that money. Keep a close eye on homes in the neighborhood, if your neighbor has a similar home and decides to price $200 less than your home, chances are their home will rent first. Be ready to adjust based on the market at any given time, new homes come on the market everyday. Some owners don’t take into consideration all of the factors that determine the value and desirability of their investment property. It is a constantly changing and evolving market and if you’re not on top of it, it could end up costing you financially. 8z Rentals keeps an eye on the market every single day and is more than happy to help you with estimating what your home could be worth on the rental market. Find a local 8z Rentals leasing agent near you .