In our last blog on rental rates, we discussed how the need to raise your rental rate might be necessary—even during times of national hardship—to cover the expenses of running a well-maintained rental as a Parrish property owner. While we have found as experts in Parrish property management that this can sometimes be a challenge for property owners due to the impact it may have when done incorrectly, the reverse is complicated for other reasons.
- When your rental rate is too low, you miss out on the income you need to cover expenses and maintain your property.
- When your rental rate is too high, you end up with long-term vacancies, increased turnover, and lost income.
Raising the rent is a challenge because there is some concern that you might scare off great renters when you fail to address an increase in your rate properly. Lowering the rent is a challenge because property owners might see this as a severe threat to their livelihood—especially during times like these.
However, dropping your rate appropriately can increase your income over time, lower your expenses, and keep your property at maximum occupancy when you bring a great rental property in Parrish back to market pricing. As a Parrish property management provider, we've seen a lot of property owners react to the pressures of COVID-19 by raising their rental rate above what their property can bear. This drives away perfectly good renters, and it tacks the burden of turnover expenses onto you as a landlord.
The outcome for property owners in Parrish is, unfortunately, the same as not charging enough rent:
- When you can't find a tenant because your property is overpriced, you can't collect rent.
- When you can't collect rent, you can't pay your expenses.
- When you can't pay your expenses, you put your property at risk—and everybody loses.
To combat this potential outcome, property owners in Parrish occasionally have to lower the rent in order to meet the demands of the market their property exists in. If you're a Parrish property owner wondering how to correctly lower your rental rate (rather than dropping it too drastically), follow these tips from the experts in Parrish property management to guide you through.
A quick note: The following article is not a substitute for legal counsel. If you need immediate guidance for successfully managing an increase in your rental rate, turn to the Parrish property management experts at Gulf Coast Property Management for real-time assistance!
Rely on Research to Set the Right Rate
Once you know you may need to lower the rate you're asking for your property based on the negative side effects of a high rental price, it's time to conduct a thorough rental analysis.
This kind of detailed research helps you pick your new rental rate based on facts, rather than basing your rate on how low you think it should be. Pricing based on the perceived value of a Parrish property is often how landlords end up with a rate that's too high in the first place—the last thing you want to do now is a hard reverse!
You should always be pricing your property using data. This will also help you maximize the true income potential of your rental. The right research will take into account various factors, including:
- The vacancy rate for local properties, especially properties comparable to yours (single-family vacancy rates, for example)
- Local market trends and demographics, such as whether your primary rental audience is college students or Baby Boomers
- The status and going rate for comparable properties owned by the competition nearby (it's always a good idea to take a look at the competition)
- The details of the individual neighborhood your property resides in, such as proximity to great schools, shopping, and other cultural hotspots.
This portion of the process can be challenging for many property owners because they may or may not know where to look for answers to these kinds of questions. Fortunately, you don't have to tackle the details alone: you can turn to a reliable Parrish property management partner!
Let a Professional Manage the Process
Your partner in property management should have the skills you need to tap into the research offered by a rental analysis. If they aren't offering you this kind of service upfront, it's worth asking why: your rental analysis results are the first place that most professional property management relationships in Parrish should start.
At Gulf Coast Property Management, we're proud to offer our rental analysis to property owners in Parrish for free! We know that finding your ideal rental rate is a crucial component of any successful rental property. Whether your property has been overpriced or underpriced, getting back in line with the market is a surefire way to stabilize your income and find great renters.
Pricing your Parrish rental property has never been more important than it is now, in the wake of COVID-19. Leave nothing to chance, and take advantage of our free rental analysis!