Charging the right monthly rent for your rental property in San Antonio may seem daunting, but it doesn’t have to be.
With some research and possibly the help of a professional property management company, you can set a rental rate that covers your monthly expenses and keeps your property occupied.
But determining what rent rate is competitive in your market requires you to have a strong understanding of your property’s details and its competition on the open market.
Here are three questions you need to answer when setting your San Antonio property’s monthly rent.
1.) What Are Your Monthly Expenses?
If you’re blessed to have full equity in your San Antonio rental property, you don’t have to worry about mortgage payments each month.
But for many, mortgages are a reality of property ownership, and you need to factor what you pay each month into what you charge for rent. After all, no one wants a rental property that doesn’t at least break even financially.
Some common things you could be paying for each month include:
- Mortgage payments
- Property tax payment plans
- Home insurance
Having a running list of your monthly expenses can help you set a base minimum you want to cover with rent. Obviously, turning a profit is the end goal for a rental property, but at least offsetting your expenses is an important consideration.
2.) Am I Taking Honest Stock of My Property?
Not all rental properties are made equal, and it’s crucial to have an honest appraisal of your property to help compare to other properties.
Some measurements for your property are mostly concrete, including square footage and age. However, other marketable details like “location,” are extremely subjective. For instance, rent for downtown San Antonio properties can be appealing to younger renters, but price may be a concern for young professionals.
For property owners, it’s crucial to take honest stock of the size, location, age, and condition of your property in finding the correct market value. Good marketers will learn that location can be sold, but it’s still crucial to understand that your property faces steep competition in the San Antonio rental market.
3.) Am I Undercharging or Overcharging?
If you’ve done some preliminary market research and determined your monthly expenses, you may have a pretty good idea of where the sweet spot in the market is.
In fact, you may be tempted to undercharge or overcharge for rent depending on whether you want your property continuously occupied or whether you are aiming for more profit.
Both approaches have their benefits, but it’s important to keep an eye on the market to determine what you want to charge.
Undercutting the rental market could lead to a consistent stream of tenants but also limit your profits. More importantly, selling a low rental rate could make it more difficult in the future to raise your rent to meet expenses.
With an honest appraisal of the San Antonio market, what your property has to offer and what your expenses are, you can make a solid decision on what to charge in rent.