Imagine having your mortgage pay for itself. This is something many people only dream of, but you can make it a reality by renting a property out to tenants. Owning a rental property is an amazing way to establish passive income, but there are limitations to how much you can make.
The average asking rent in the United States is just over $2,000. It's essential to understand what dictates this number and influences rental valuation.
This will help you set the appropriate rent price. Let's explore the key information you should know.
"Rent Can Always Be Raised"
Many states have rent control laws for landlords. These dictate how often, and by how much, landlords can raise rent.
If the landlord chooses to raise rent, they must provide written notice. The percentage of increases varies between counties and cities. One area of Washington might have higher rent increase limits than another.
It's best to thoroughly research this information so you don't run into legal issues. The last thing you want is to encounter costly fines or fees due to negligence.
"I Can Set Whatever I Want"
This is one of the most common myths that people believe. In many cases, nothing is stopping you from pricing your rent at whatever you want.
However, the price must match the property's size and amenities. It should also be competitive with other properties in the area. If you price your rent too high, it's unlikely that you'll get viewings.
"I Can Change Rent If Needed"
Some landlords believe they can increase rental value once they find out their applicant's monthly income. This couldn't be further from the truth.
Attempting to do so will almost always result in the applicant looking for alternatives. This can extend vacancies and cost you thousands of dollars in upkeep each month.
"I Know the Value Best"
Unless they have substantial experience in the real estate industry, landlords won't be the best resource for determining value. Instead, it's recommended to work with a professional. Property management companies can get you started on their track and ensure you overcome obstacles you would have struggled with.
When looking for a property management company, ensure you research their past reputation. Previous feedback will provide valuable insight into what you can expect.
It's also essential to assess how enthusiastic they are about managing your property. If they don't seem interested in helping you reach your goals, you could have a negative overall experience.
Always Determine Proper Rental Valuation
Without the right rental valuation, you risk deterring potential tenants from your property and dealing with costly vacancies. Setting your rent too low could also detract from your revenue.
PMI Equitas is a full-service real estate asset management company that serves the North King and Snohomish counties in Washington State. We strive to make our clients' lives as easy as possible, and we're part of a national franchise that has served the industry for over 20 years.
Learn more about how we can help when you book a free rental analysis.
