What's the Right Amount of Rent for My Charleston Rental Property?
Whether buying a new rental property or reviewing cash flow and income numbers for one of your current Charleston investments, how can you be sure you're charging the right amount of rent? Trying to guess a "good" monthly rate or setting it at a number you've had in mind can be an expensive mistake that damages your real estate investment income.
Setting the ideal monthly rent amount requires research and experience. Many investors don't realize they're leaving money on the table with a rental price that's too low (or too high) to generate the income they need. When the rent is too high, your property sits empty without a renter willing to pay that amount. When the rent is too low, investors lose money every month—even when your renter pays the rent on time.
How can investors set the right rent amount? We're here to help with our expert Charleston property management insights!
Start With Research
As in other areas, rent in Charleston is based on the property and local market supply and demand. The "ideal" monthly rent amount can change from lease term to lease term depending on market conditions and the demand for rentals like yours. However, investors won't know if the current rent amount is off-base based on market conditions without reviewing the right research and current data.
If you struggle to find a renter after months of an empty property, you've probably set the rent too high. Even if you've always wanted to rent out your Charleston property at a specific "goal" amount, the market must justify that amount—or you risk losing money from extended vacancies.
Let the market be your guide! The ideal rental price won't be a disappointment to your bottom line, even if it's not the price you have in mind. When determining the ideal rate:
- Evaluate the local market supply and demand (vacancies vs. occupied rentals) by considering other rental homes in the area
- Check rental rates for comparable properties in the neighborhood
- Factor in square footage, the number of bedrooms, recent upgrades, and amenities (new appliances, outdoor space, etc.)
Using rental market research isn't a "one and done" process. Before every new lease term, review current market data to confirm (or adjust) the monthly rent to reflect the market demand. If you aren't sure where to find the market research you need, work with a Charleston property management company. We have up-to-date information and industry experience to help investors set the ideal rental rate for every property in their portfolios.
Keep Rules In Mind
In addition to the research, set the right amount of rent with this rental property rule of thumb: charge one percent of the value of the home. This means that an estimated monthly rent for a $100,000 house is $1,000. Depending on the property's size or more high-end homes, the percentage calculation can adjust between 0.8 and 1.1 percent based on what makes the best sense for your rental in the market.
Calculating the rent based on property values (not the monthly mortgage payments) can be a more accurate way to cover all expenses (plus put profit in your pocket). Work with the best Charleston property management company to confirm that the monthly rent amount makes good sense for the market and your long-term income goals.
The Right Rate Boost Marketing Efforts
You might have a stellar property listing that catches the attention of potential renters as they scroll through search sites for a new home. However, when they click on your listing and see a monthly rent that's too high, they'll keep scrolling for a better-priced Charleston rental home.
When a potential renter sees your listing and a property that meets their needs at the right price, they'll reach out for more information. When marketing your property, make sure your listings include high-quality, professional photos, and compelling content to catch the attention of the best Charleston renters. Work with a Charleston property management company to list your rental on all major listing sites, including Craigslist, Trulia, Zillow, Hotpads, and military and college websites.
Monitor the responses you get (or lack of responses) to your listing. If you don't receive enough rental applications within a few days or a week of posting the listing, you might need to adjust the rental price to make your rental stand out better.
A Charleston Property Management Company Sets the Right Rent Amount
A Charleston property management company knows the market and understands how to keep your rental property competitive with the right rent amount. We also stay up-to-date on current market conditions. If research points to a rental rate adjustment, we make it happen at the right time to help keep your properties occupied with new renters or residents who renew the lease.
Let the Charleston Property Company help you set the ideal rental rate and maximize your income! Contact us to learn how we can help.