Setting a rental value that’s both competitive and profitable isn’t always easy. In the Visalia rental market, rents are going up. Owners have an excellent chance of earning more than they were a year or two ago, and even with statewide rent control affecting a lot of properties in the market, there’s a comfortable demand for well-maintained rental housing, and tenants are willing to pay for a great rental home.
When it comes to setting your rental price, you have to follow the market. It really doesn’t matter how much you need to earn or how much you hope to earn. The market will drive what you can ask in rent.
Your competition will, too. Take a look at what other homes are renting for in your neighborhood, and compare what your property offers to what they offer.
In today’s blog, we’re talking about how much monthly rent you can ask for your Visalia property without overpricing the home to the point that you’re facing a longer vacancy or underpricing the home to the point that you’re leaving money on the table.
Collecting Data and Comps on the Visalia Rental Market
Before you price your own property, you have to know what other homes are renting for. This data is easily available now, but you have to look for it, and you have to invest some time analyzing it. This isn’t a two-minute process; it’s going to take some time. If you’re working with good technology, you’ll have an idea of what homes are renting for and how long they’re on the market before someone leases them.
Visalia property management companies can streamline this effort by providing a database of the rental values they’ve tracked over time. Property managers also work in pocket areas, so the average rents are easier to identify. What you charge can vary greatly even from street to street, which is why the precision of this data is so important.
If you want to get an accurate idea of what competing properties are listed for and rented for, you need to do more than glance at Zillow listings or Craigslist ads. You need to spend some time examining those prices and the homes that are renting at those levels. See how your property compares.
Visalia Market Rents in 2022
The current rental market is a great one for owners and landlords. There’s a high demand for good rental housing, and the inventory isn’t exactly keeping up. So, if we run our comps and we see that homes similar to yours are renting for about $1,600 per month, we’ll set the initial asking price at $1,900 per month.
This may seem like a risk, but it’s one worth taking.
Tenants are getting used to higher prices. They’re not flinching at the higher rents, and they simply have to scan through any listings and they’ll see that this is what people are willing to pay. The current rental market will bear the higher price tags.
It doesn’t mean things will stay this way.
When rents start to come down, we have to be prepared for that. We’ll be less likely to raising your rents so far above the average rental value in Visalia.
Controlling that pricing process is what good property managers can do for you. We’re always watching the market and we’re studying every trend.
Compared to other markets in California, Visalia’s rental market has always been fairly inexpensive. People here have enjoyed affordable rents, and we’re getting a lot of new tenants in the area who are fleeing more expensive cities and able to work remotely. Cheap housing is what we have going for us. There isn’t a huge demand for people to live in Visalia, but when their cost of living can decrease, they’re willing to make the move.
Improvements in the local area are also drawing new tenants from more expensive markets. This area is getting much better with new restaurants opening, a bullet train stop being installed 15 minutes from here, and more local industry and economy. That’s going to be great for rental values once the market catches up with its potential.
The Right Rental Value Matters
How do we price your home when we’re preparing to list it?
We take a look at the comps and then we make a decision about how much we can bump up that price to earn you as much rental income as possible.
The comps you gather aren’t the only factors that go into pricing your home. Maybe you have a pool. Maybe your home has been recently upgraded. You might have extra security or one of those video doorbells installed. If you have a fenced yard or a private garage or a washer and dryer inside your unit, these things will increase what you’re able to charge in rent.
Accessing the right technology is an important part of establishing rent. There’s a danger in using the wrong price.
If you price your Visalia rental property too low, you’re losing money all year long. You don’t have the chance to increase your rent until the lease term ends. And, it will be hard to catch up to market rents if you’ve spent a year under-charging your tenants.
Overpricing the home comes with its own dangers. You might think you’re going to earn more money every month, but if that property is vacant for an extra two months due to the high price tag, you’re losing more rent than you would have gained. A vacant property isn’t bringing in any money. In fact, it’s costing you every day that it’s unoccupied.
Do your homework. Pay attention to your property. Drive through the neighborhood so you get an idea of what else is out there. Consider making some updates and improvements that might help you earn more in rent.
If you don’t have the time or the resources to do this yourself, get some help from a Visalia property management company. We can make a big difference in what you charge and what you earn. If you’d like some help, please contact us at The Equity Group.