Rental prices have been rising steadily, thanks to inflation and a competitive Boston real estate market. With a lot of tenants feeling priced out of buying a home, more and more of them have to continue renting. That’s leading to higher rental values and a great demand for well-maintained rental homes.
This benefits you if you’re a rental property owner. You can ask more for your rental, and you can comfortably raise your rent at renewal time.
It’s important to remain competitive, however, and to be strategic. You don’t want to overprice your property and be left with a longer vacancy period.
Here’s how to price your Boston rental property competitively while ensuring you maximize what you earn every month in rent.
Know Your Market
First, get an idea of what the average rents are in Boston for properties like yours.
This can be done by taking a look at rental listings. You can peruse Zillow, Trulia, Zumper, and other online rental sites. But don’t stop there. Those sites will show you the listed prices, but there’s very little nuance to what you’re looking at. A listed price is not always a rented price. When a home is vacant for too long, an owner may lower the price or negotiate with tenants who have expressed an interest.
Access better data by talking to a Boston property manager who can give you specific rental rates for homes that have recently been leased. You don’t want to base your own rental value on a home that’s overpriced and sitting through its second month of vacancy.
Always use properties that are similar to yours when you’re conducting a comparative analysis. If you’re renting out a three-bedroom, two-bathroom suburban home, looking at rental rates for loft apartments in downtown Boston won’t help.
Consider Your Amenities, Condition, and Property Type
A competitive price depends on a lot of things. The Boston rental market will always establish your price range, but your own property’s unique characteristics will allow you to set your price higher or lower than average rents. Here’s what you can consider when setting a competitive price:
- Location. Is your rental property well-located? If so, you can charge a bit more than an owner with a property that isn’t in a great neighborhood. Consider schools and whether your property is close to highways and public transportation. Is it easy for tenants to get to the grocery store, restaurants, and shops?
- Property type. Single-family homes will generally rent for more than apartments or units in multi-family properties.
- Amenities. Are you offering upgraded floors or stainless appliances? Is there a garden tub in the primary bathroom? These things will raise your rental value.
- Property condition. You can be more competitive with your price when you have a property that’s well-maintained, upgraded, and attractive. Tenants will be willing to pay more for features like wood flooring, in-unit laundry, pretty landscaping, and other improvements. Think about what you’re willing to invest in renovations when you want to earn more on your Boston rental home.
The size will also matter, and layout. If your home is awkward and there’s nowhere to park, you’ll have to price it for less than a home that has an open floor plan, great natural lighting, parking, and outdoor space.
Think about the Tenants You’re Attracting
Tenants are feeling squeezed by higher prices, and while you want to earn as much as possible on your property, you don’t want to list it so high that good tenants simply ignore it. When you’re screening applicants, you’re probably going to look for income that’s at least three times the monthly rent. Reaching that threshold is becoming increasingly difficult for tenants.
You can be competitive by keeping your own rent just below what the market might demand. Offering a great home at even $50 below what other homes are asking will allow you to attract the best tenants quickly. You’ll still earn higher than average rents because the market is working in your favor right now.
Increasing Rents at Renewal Time
How can you be competitive at renewal time?
Your goal is always to retain your tenants. When you have good residents in place who pay rent on time, help you take care of the property, and follow the terms of the lease, you want to keep them. Turnover costs are higher than ever, and you don’t want to give up even a month of rental income waiting to fill your vacancy.
Retain your tenants by making a reasonable offer when it’s time to renew the lease agreement.
Most tenants will expect that their rent is going up when it’s time to renew the lease. If you want to hold onto your tenants, however, don’t make the increase so shocking. You’ll want to take a look at the market and see where your rent should land. Price it competitively by leaving it at the lower end. You’re still earning more every month than you were the year before, and your tenants are incentivized to stay in place. They’ll do their own research and see that you’re giving them a deal. This will help you earn more in rent and avoid those turnover and vacancy costs.
Are You Allowing Pets?
Pets can be a secret weapon when it comes to making your property more competitive on the market and earning more in rent every month.
Here’s why pet-friendly properties are more profitable:
- You have lower vacancy rates. More than half the tenants in Boston have at least one pet. When you don’t allow pets, you’re less competitive because you’re losing more than half of the rental pool.
- You can charge a pet fee.
- You can charge pet rent. Make up for the lower and more competitive rent you’re asking by charging a pet fee when your tenants have pets. This increases what you earn and protects your property from potential pet damage.
Consider allowing pets. It’s better for your rental value.
If you’d like some help pricing your Boston rental property competitively, we can work with you on establishing some comparable rents and evaluating your home to tell you where you might find yourself when it comes to competing with other rental homes. Contact our team at Platinum Realty Group.