It goes without saying that San Diego has one of the most exciting real estate markets in the country today. It had an astonishing 18% growth rate for property values and faced only a minor population decrease.
If you've got a rental property, you don't need to worry about attracting tenants. You can expect them to keep showing up and requesting a viewing!
However, with such a competitive market, you'll have to be wise with your rental pricing. How much should you charge?
You should first consider a rental valuation. Here are some myths about rental pricing you may have heard:
You Must Stick to the Price
When marketing your rental property, a potential tenant will first assess if the price is worth it. They'll have an idea of what an average home that's similar to yours will cost per month.
When conducting a rental valuation, you'll get a quoted price that recommends how much you should charge. The biggest myth is that you have to stay with this quoted amount.
You don't, however, you shouldn't veer too far from this price. For example, if your valuation is $1,000, then you can consider raising this to $1,200. However, if you go much higher, you'll have to offer a lot more to your tenants than similar properties.
You Only Need to Have One Rental Valuation
This is another absurd myth! The rental market changes and you have to stay up to date with the trends. You should consider having a rental valuation towards the end of each lease agreement.
This lets you know if your property values have increased, decreased, or stayed the same. It gives you an idea of whether you can justifiably raise your rental price.
However, even if you can raise your price, you should do so cautiously. If you have a great tenant, they might want to forgo extending their lease if you increase the rent.
Even if your rental fee isn't as high as you'd wish, it's better to focus on keeping a fantastic tenant around. This will earn you a lot more money in the long run.
You Can Know the Value
You shouldn't assume you can understand your rental property value. No matter how experienced an investor might be, it's a myth that they'll be able to predict their property's rental value.
A professional rental valuation can help you determine reasonable ROI rates for your property. There's no harm in calculating it yourself, but you should always get an expert opinion before proceeding further.
The San Diego Rental Market Awaits
We've now busted the common myths surrounding rental valuation. It's a key aspect of running a successful rental business, so make sure you take it seriously.
What's the next step? You should hire a property management company to help you build your rental business. They'll offer many services so you don't have to shoulder the burden yourself.
With a team that has close to 20 years of experience working with over 3,500 units, PMI San Diego might be the best choice for you.
