Setting the right rent: Tips for first time investors
Taking those first steps into the property investment world can be daunting and confusing. After all, there's a lot of research and learning that needs to be done before you have a decent grasp on how the industry works. Everything from finding the right tenants through to looking after the property, there are a wide range of different things to consider.
For example, understanding how much to charge for rent may seem like something simple to deduce. However, there are a lot of different things to take into consideration before setting this price. Here are some tips to help find find a fair, profitable rent for your individual investment real estate in Surfers Paradise.
Real estate desirability
The first rule of figuring out how much to charge for rent is understanding how desirable it is to live in your property in the first place. It stands to reason that the more people want to live in your investments, the higher you could potentially charge for rents before people begin to look elsewhere.
There are a range of things that could affect this. For example, the location of your property is a major thing to consider. If it's located in an up-and-coming suburb with future infrastructure projects and growth possibilities, there is the potential for charging a higher rent.
However, the opposite is also true. If the demand of rental properties in the local community has started to dwindle or the general economic trend of the area is dropping, chances are that charging a high rent will be met with a lot of disinterest and unoccupied real estate.
Therefore, hitting a happy medium and working within the wider contexts of the property market is the best way to gauge how much you should charge for rent of your investment properties.
Look towards your competition
Keeping things in line with the overall growth patterns of Australian real estate, it's always a good idea to check out the asking rents for other properties in your local community. Basing your own figures off the successful rates of other investors is a great place to start – especially if you're a newcomer to the investment game.
Compare and contrast your properties with their portfolios, study the spread of asking rents in relation to the types of real estate they own and investigate how local amenities factor into their success. This could be worth doing before you even commit to any real estate purchases, as part of your initial research.
Seek professional guidance
Furthermore, speaking with local real estate agents is another great way to gain some insight into the local market. Their job is to have an ear to the ground, watching for movements and trends in the property world – so their insight into possible rental prices could be a fantastic source of information.
Another route to consider could be the hiring of a property manager. These professionals will help you to maximise your investment returns by running your investment portfolios, with their expertise being invaluable in the long run. Much like real estate agents, their career is the property market. They can help you find the perfect tenants, set the rent at a competitive rate and take over all your landlord responsibilities, allowing you to simply reap the rewards of a strong investment portfolio.
These are just some of the factors that can influence your rental price. The challenge is finding a good rent that is both fair to your tenants while also being profitable enough to justify your property portfolio. It can change over time, so be sure to reevaluate the figure annually to ensure you're still on the ball and getting the best value out of your homes as possible.