This question not surprisingly is the one that most rental property owners find the most challenging to figure out. Asking a high rent could see you sitting on an empty property for longer than you would like, not charging enough could also see you out of pocket.
Here’s some tips to find the sweet spot to ensuring you have as little down time as possible between tenancies.
Think about your property
- The area
- The condition of the property
- The time of year
School zoning, proximity to public transport, supermarkets, cafes and universities are all factors in what appeal your property will have to prospective tenants, as well as how much they will be willing to pay for it.
The condition of your property also has a bearing on the price. High end kitchen appliances, dishwasher, modern bathrooms and kitchens, these are all things that will make your property stand out and could get you rent in the upper quartile
The time of year often gets overlooked. Generally speaking in summer you will achieve a higher rent than you will in the middle of winter.
Market comparison: The next step is to jump online and check out your competition. Look to see what other similar properties are renting for in the same area where your property is. In New Zealand Trade Me is the biggest portal followed by realestate.co.nz.
Average prices for your suburb: Also check out a website called Market Rent which is the Tenancy Services website which keeps data for properties where bonds have been lodged over the last six months. When you look here you will see that the properties are divided into lower, median and upper quartile. If your property has some extra features compared to others in the area you could look at the upper quartile. If you know it needs some work then look at the lower end. Click here to go to the Tenancy Services website.
I need to cover my expenses: When deciding on the price one word of advice. Don’t think I need xxxxx as this will then cover my mortgage, rates and insurance. Residential property rents are based on what other similar properties in the area rent for not on what your expenses are.
When do I start advertising: Start advertising as soon as your tenants give notice so that you give yourself as much time as possible to find a new tenant. If after a week of advertising you haven’t had many enquiries then re evaluate your asking price. For every week your property sits empty you are losing 2% of the annual rent
e.g. if your property rents for $500 per week and it sits empty for two weeks you have lost $1000. That equates to $20 per week when calculated over the year which effectively brings your rent down to $480 per week for the first year.
Renthub is here to help you advertise your property and reach more tenants by listing on Trade Me, realestate.co.nz, OneRoof, Facebook and Renthub for one low price of $99. Learn more about Renthubs Tenant Finder service, click here.
The information contained in this article does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. Renthub Ltd does not accept any liability that may arise from the use of this information.