One of the questions we get from property owners most often is: how much should I rent my house for? Tenants also call us to ask why rental prices are so high. The question comes from two different perspectives, but it’s essentially the same. The rental market really controls what you can earn on your rental property. You want to earn the most possible for your property, so today we’re telling you about rental values and how a Patterson or Modesto property management company can help you set a competitive price.
Rental Value of My Home: How the Market Impacts Price
Studies show that the houses in the bay area, including San Francisco, San Jose, and Silicon Valley, have become really expensive. As the housing prices go up over there, people look for other places to rent so they can afford more. That makes the Central Valley more attractive. We are within commuting distance to the bay area, so tenants are looking locally in Merced, San Joaquin, and Stanislaus County for housing. Prices are relatively cheaper here than they are in the bay area. So, with more people coming here, the prices in our local market have gone up. The demand is rising while the supply remains stable. There hasn’t been any new construction, so our supply hasn’t changed. But demand has increased, which means a house that could have rented for $900 a month in Modesto or Turlock is now renting for $1,200. That same house that once rented for $1,200 or $1,300 in Merced is now renting for $1,400 or $1,500. Those prices are even higher in San Joaquin and Stockton.
Setting Your Rental Price
As an investor, figure out how much your expenses are. But remember that even if your expenses are $2,200 a month, that doesn’t mean you can charge $2,300. The market bears a certain price and if you go too high, you won’t get a good tenant. Your home will be vacant and you won’t earn any income. You need to do a market study and conduct some research. A company that does property management in Patterson, Modesto, or the greater Stanislaus county area can help with this. You can also look at Zillow, Trulia, or even Craigslist, which I think is more accurate, to get an idea of what homes like yours are renting for in the area. When you do that research, you can measure it against your expenses and come up with a price.
If you need any help pricing your rental property, or you’d like to hear more about our Modesto or Patterson property management services, please contact us at New Bridge Management. We’d love to tell you more.