It is prudent to employ an experienced property manager to do a rental appraisal that includes thorough market research.
What Is Market Rent?
Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay for a tenancy.
It needs to be similar to the rent charged for comparable properties in similar suburbs.
Before advertising a property to rent or before doing an annual rent increase, it’s essential to do market research that accurately assesses the rental market by comparing apples to apples.
If a landlord charges significantly higher rent than the market rent, a tenant can apply to the Tenancy Tribunal to ask for the rent reduction.
What Drives The Rent Market?
Typically supply & demand drives the rental market, short supply; rents go up, an oversupply of rental properties on the market rents will hold or sometimes even drop.
When rentals are in high demand, it pays to keep a close eye on the market, as is the current case in Palmerston North and the surrounding areas.
Local Knowledge & Expertise
Having local knowledge of surrounding suburbs is essential.
Price your property too low, and you will be missing out on higher returns.
Price your property too high, and you may find you have much less interest from prospective tenants and take alot longer to rent.
It can be challenging and frustrating sometimes to find the right balance, which is why an experienced property manager can help advise on setting the right rent to ask. That attracts prospective tenants and, at the same time, provides you with a better overall return on your investment property.
Comparing similar properties currently advertised online and researching historical data such as the Tenancy Services website with local knowledge of the area gives property investors and homeowners a professional opinion on what their property might rent for in the current market.
If you want to expand your investment portfolio, a rental appraisal can help gain insight into the potential returns of properties you may be considering purchasing. Or, if your property is coming up for rent or isn’t providing the returns, you would expect we can assist.
Contact us for a free, prompt rental appraisal call 0272498295