You will lose tenants if you overcharge. If you don’t charge enough, you won’t be paid. One of the most challenging—and crucial—aspects of owning rental property is choosing how much to charge for rent. The want to sell the property for as much money as possible may drive you to price it extremely high, but doing so will scare off potential tenants and keep the apartment empty.
Setting the ideal rent guarantees that you’re making enough money to pay your bills, generate a profit, and maintain your competitiveness in the neighbourhood real estate market. Additionally, charging the appropriate amount will draw the correct kind of tenant. Check out these advice if you’re unsure on how much to charge for rent:
Pay attention to the property market in your area.
How much rent to charge will depend on the local housing market. Eventually, rent costs have grown by around 20 percent in the last 12 months. Nationally, a one-bedroom apartment costs RM1,660 per month, while a two-bedroom costs RM1,964. According to the National Association of Realtors, prices will probably continue to rise since there is still a high demand for rental houses and a shortage of available rentals.
Look at the recent changes in rent pricing in your neighbourhood. To learn how other property owners have changed their rent rates, get in touch with them. Speaking with a local real estate agent is an additional choice. They might go to your house and offer you their perspective on the rent price.
Evaluate the rates of similar properties.
Examining the rents being charged for comparable houses in your neighbourhood is one of the greatest methods to determine how much to charge for rent. Look through websites like Property Guru or IBilik which allow you to filter results by location, property characteristics like the number of bedrooms and bathrooms, and other factors like whether you accept pets. Additionally, look for property postings on websites like Facebook..
Plan to see other rentals to get an idea of how yours compares to the competition. Consider the age and condition of the property, the age and condition of the apartments, and any amenities that the residences provide when comparing properties and costs.
Take into account the 1% or 2% rule.
The 1 percent or 2 percent guideline, according to some financial gurus, might assist you in determining how much to charge for rent. This regulation states that the minimum monthly rent you should charge is equal to one percent (or two percent) of the property’s purchase price. Add the cost of repairs and costs to the purchase price before multiplying by 1% to account for them.
If a residence costs RM200,000, for instance, the minimum rent would be RM2,000 under the 1 percent rule and RM4,000 under the 2 percent rule.
The 1 percent or 2 percent guideline should only be used as a general reference when determining whether to first invest in rental property. As soon as you determine the rate for your home, compare it to the rent of similar properties. It’s often best to rent properties more in line with the local market.
Rent should include amenities.
Due to the strong demand for rentals, enhancing a property’s amenities might make it stand out and draw in potential renters. So, think about paying a utility payment, cancelling pet fees, or covering renters’ parking expenses.
Include the characteristics of the property and any available facilities that you think would be most appealing in the rent pricing. Apartments with a view of a garden, for instance, will be more in demand than those with a view of a parking lot. Rents may be more for homes with balconies, on higher floors, with newer appliances, or with recent modifications.
How much should I charge for rent?
The amount of rent to charge is determined by a number of things. However, setting the rental price appropriately is essential since it keeps the home rented and earning money. Vacancies are expensive, after all.