If the property is vacant, you will need a rental property appraisal to ensure a suitable tenant can be found in order to help you cover the property’s expenses. An experienced real estate property manager is well trained to help explain the current rental market for houses and apartments.
If the property is already leased, it will be important to ensure the tenant is paying a reasonable market rent, and if the current property manager is able to provide a level of service which aligns to your requirements.
1.Rental Property Pricing Myths
There are some time-honoured, unwritten rules amongst hard-nosed real estate investors that say you should be able to achieve around $100 per week for every $100,000 you have invested in purchasing a property. So, if you’ve just invested $450,000 in a two-bedroom apartment in Melbourne, they suggest you’d be expecting $450 dollars a week in rent. Unfortunately, this is a myth. The market has its own set of rules and they don’t always align with investors’ expectations, therefore, it’s critical that you do your own rental property research on what’s available on the market and consider getting a professional opinion.
2.Comparing Similar Rental Properties
Start by doing an online search of vacant rental properties in the same suburb as your investment property. Pick out the rental properties that seem most similar to yours and attend their open inspections. You can then meet property managers when they don’t realise they’re being interviewed so you’ll get a real-world appreciation of their quality of service and local rental market knowledge. Ask them what else they have in the same price range and see what they say!
3.Book a Rental Property Appraisal
By now you will have a pretty good understanding of what seems like a realistic rental property price, and a list of property managers and estate agencies who appealed to you due to their professional conduct, marketing approach, or comprehensive knowledge and advice.
When asking for a rental appraisal, a good way to assess a property manager’s responsiveness is to contact them by email or complete your rental appraisal request online. This will highlight how quickly they are likely to respond to tenant inquiries and even your own, if you’re going to sign a management agreement with them.
4.Understand Rental Appraisal Methods
Once you’ve received several rental property appraisals from your shortlist of real estate property managers, go back to each of them these questions:
- What rental property appraisal methods they used?
- What evidence they have of the number of prospective tenants currently on their database looking for a property like yours?
- What is their marketing strategy to attract the highest rental price for your property?
Once you’ve been through this rental property appraisal process, you’ll be well informed and ready to make the call on what price to ask and which direction to take.
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.