Building tremendous cash flow starts with setting the ideal rental rate for your Detroit investments. Investors can sacrifice significant income with a monthly rent that's too low (or too high), but how can you know if you're losing money?
Whether you own turnkey or traditional rental properties (or diversify your portfolio with both investment types), the wrong rental rates can sink your long-term income plans. Guessing at a rate that seems about right or setting the rent with a goal amount in mind can work against generating the revenue you need from your rental properties.
What do investors need to do to calculate the ideal rental rate for Detroit rental properties? Apply these insights from the Own It Detroit team of seasoned professionals!
Apply Market Research (for Each Property)
Even if you've invested in this market for many years, current market analysis should always drive the rental prices for every property in your real estate investment portfolio. Whether you have one, five, or fifty prices, applying rental market research is critical when setting the rent for every new lease term and every property.
Keep in mind: no two rental properties are the same! Whether it's convenient for investors who own a significant amount of Detroit investments or you don't have access to the research you need, applying the same monthly rent amount to multiple rentals—without the research to back it up—can be an expensive mistake.
What Does Market Research Include?
What do we mean by "research?" Investors don't need to walk the neighborhoods or google "best rental prices in Detroit." However, collecting the right data and analyzing market conditions is well worth the effort when determining ideal rental amounts to generate tremendous cash flow.
Rental market research includes:
- The number of rental homes in the market
- How many rentals are multi-family properties vs. single-family rentals
- The number of vacancies vs. occupied rentals
- How many days rental properties stay on the market
- The average amount of rent per square foot
- Average rental application fees and security deposit amounts
With this compilation of information, real estate investors can understand how their rentals measure up to current market conditions. Market demand, average rental prices for similar properties, and current trends help investors target the ideal rental rate to stay competitive with their Detroit investments.
Consult Local Experts
Whether you're a local investor or choose this market from out of state, getting your hands on up-to-date rental market information can be challenging. The good news is that you don't have to find the research or analyze it on your own!
Local property management experts have current market research and the experience to analyze it for you. They can let you know if you're losing money with a monthly rental price that's too low (and recommend updating it to a better rate). They'll also deliver insights about a property that's overpriced and driving renters away.
The best Detroit property managers have extensive experience in our market. We understand the right factors to consider when reviewing rental prices for your existing investment properties. We also help investors evaluate the potential for new properties to help them avoid investment mistakes.
Protect Your Income With the Right Experience
Adjusting the rental rate must happen at the ideal times (and incremental increases) to help renters adjust along with a higher monthly rent. If you suddenly discover that you've shortchanged yourself with a rental rate that's too low, hiking up the price of your property at the wrong time and a significant increase will send residents looking for a new home.
A property manager helps rental property owners protect their Detroit investments and income with expert strategies to raise the rent when the market justifies a bump in price. We never want a rate increase to increase turnover rates. With the right experience, a property manager:
- Approaches renters well ahead of a lease renewal to let them know of a rate increase
- Avoids a significant increase to help residents more easily absorb a higher monthly rent amount
- Markets rental properties with the ideal rental rate when it's time for a new renter
- Delivers excellent service that encourages residents to stay in the rental home they enjoy (even with an increase to the monthly rent price)
Investors never need to settle for a rental rate that isn't generating enough income from their Detroit investments
—but raising the rent too high and too quickly can limit real estate investment income, too.
Trust a Seasoned Property Management Professional
Trust a seasoned professional to guide you to the best rental rates! Own It Detroit helps rental property owners review up-to-date research and analysis to make market-driven decisions about monthly rental rates.
No matter how many Detroit investments you own, our expert property managers apply the best strategies to maximize your income. Contact us to speak with one of our seasoned professionals to review your rental rates!
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