The California rental market is absolutely booming. Current statistics show that a whopping 44% of Californians rent their homes, making the state second only to New York in terms of renters.
In competitive markets like this, your rental valuation must be spot on if you want to keep your vacancy rate low. How do you know what's a myth and what's a fact when pricing your Fairfield, California rental property? Read on for the scoop on four of the most common rental pricing myths!
1. The Interior Is All That Matters
A classic mistake many property owners make is that they place too much emphasis on the value that a home's interior brings. Adding top-of-the-line kitchen appliances, countertops, and cabinetry does command more rent, but that's not the only thing you should consider when doing your rental analysis.
Think about where your property is located. If your property is in the middle of a thriving downtown, you'll pull in much more money from the location than from the interior. On the other hand, if your property is in the suburbs, then the price should be priced in line with other properties in that area.
2. Rental Valuation Isn't Necessary Forever
Rental valuation is a term that refers to the optimal amount of rent, which includes monthly expenses and a specific percentage of profit. It also takes the current rental market into consideration. Many property owners have a goal of paying off the mortgage on their investment properties and believe they can do away with rental valuation at that point.
If you want to make sure your vacancy rate stays low, then you'll need to keep up with your rental valuation year after year.
3. You Can Evict Tenants Who Don't Pay Enough
Some landlords believe that the solution for tenants who don't pay enough rent is to evict them. The reality is that eviction should be your last resort. Not only is it an expensive and lengthy process, but it'll also leave you with a vacant property.
If you're feeling the pressures of inflation and need more money from tenants, it's best to wait until the end of the lease and offer them a higher rate with renewal. If your tenants do not accept the new rate, then they can move out, and you can find tenants who will pay your optimal rate.
4. Raising Rent Is Guaranteed
Many real estate investors take it for granted that they'll be able to raise rent every single year. Depending on market conditions and local rent control laws, that may not always be the case.
It's important to be deliberate about your renewal offers. When the market is down, it's sometimes better to forego raising the rent to help retain great tenants. When things are booming, you can be more aggressive with increases.
Boost Your Rental Income Today!
Navigating your rental valuation and reducing your rental vacancy rate may feel like two conflicting tasks. Taking the time to thoughtfully value your rentals is actually one of the best things you can do to make your properties stand out in California's competitive rental market. When in doubt, seek the assistance of a local professional property management expert!
Are you looking for a property management company that knows the Fairfield, California rental market inside and out? Contact PMI Northbay today to learn how we can make your investment properties a success!
