The average Houston landlord earns a massive 15% above the national average from renting out their investment properties.
However, achieving this lucrative income relies on having an accurate rental valuation. Unfortunately, many landlords get this step wrong because there are several troublesome myths in the market that mislead property owners, potentially costing them money.
To ensure you don't make the same mistakes, we're going to debunk four common rental market untruths.
Keep reading to find out more.
You Should Copy Other Landlords' Rental Prices
One of the most prevalent myths is that you should simply copy what other landlords in the area are charging. But this can cost you a lot of money. Instead, it's best to use rent analysis techniques that can give you a property value estimation that is specific to your home.
For example, your rental may command higher fees than a neighbor's if you have a beautiful garden or have made recent renovations. This due diligence can indicate that you can then charge more and increase your monthly income.
Low Rent Prices Always Lead to Higher Occupancy Rates
Lower rental prices can deter higher-paying tenants if they think your offer suggests there are issues with your property. You may also enter a race to the bottom, with local landlords charging as little as possible to appeal to renters. This can make it harder to attract quality tenants who will stay for the long term.
Instead, you should charge what your property is worth. Tenants will be happy to pay more if they're getting an excellent rental, and they may also be likely to stay longer.
Tenants Will Leave if You Increase Rent
Raising your prices is a valid strategy for rental income optimization, but many landlords are afraid to take this step. There is often a fear of tenants leaving at the end of their lease should you apply a price increase for the coming year.
However, many tenants understand that Houston rental prices change and are willing to pay more if the increase is reasonable. The key is to be fair and to explain the logic behind the price rise so renters can accept the cost as a valid extra expense.
You Shouldn't Negotiate Rental Prices
It's not always necessary to negotiate, especially if it will significantly lower your monthly income. But sometimes it can be helpful to be flexible on pricing, particularly if market demand is temporarily lower than usual.
If you're uncomfortable negotiating and want to ensure you still profit the most from your rental home, hiring a property manager to handle this on your behalf can reassure you.
Get an Accurate Rental Valuation From PMI Bear Creek
Having an accurate rental valuation is essential for maximizing income as a landlord. To arrive at the correct figure, you mustn't fall for the various myths you sometimes hear in the market.
At PMI Bear Creek, we base our property rental figures on solid facts. As a local company, we understand Houston rental market trends, and we're also part of a larger franchise that has over two decades of industry experience. This combination means we can help you get the highest returns from your investment property.
Contact PMI Bear Creek today, and start earning more from your rental.
