If you are new to the landlord game, pricing of your rental units is always on your mind. In California, the eviction rate is high enough to cause more concern, with over 306,537 evictions between 2014 and 2016 in the Los Angeles and San Bernardino areas.
But at the same time, the rental vacancy rate is very low, and currently stands at about 3.49 percent, which is good news for landlords.
You want to find that magic formula that keeps that vacancy rate low, while also keeping your own eviction rates low. Read on to find out how much to charge for rent in the renter's market of California.
How Much to Charge for Rent in California
With vacancy rates low in California, it's a renter's market. If they aren't happy with your unit, its conditions, or rent costs, they will find something else.
The first step in learning how much to charge for rent is in looking at comparable rates in your area. Listings with property managers are a great first place to look.
But you also want to poke your nose around the neighborhood and see what other landlords are charging. Too low, and you run the risk of bad tenants, and too high, and you run the risk of an empty unit.
You want the perfect tenant that will lock in a longer lease, which is one of the many reasons single-family homes are perfect investments. It's not a pipedream.
The perfect tenant with long leases can actually happen to you, no matter the market, if you have the right tools.
Factors That Influence Rent Rates
Take into account how many bedrooms and bathrooms you have, compare them to other units that are similar, and you have a starting window.
New constructions will have higher rents than older models typically. And the time of year will also play a role, with the high season for renting usually occurring in the summer.
See how those numbers compare with your mortgage payments, and set your rent rates from there.
If you are coming up low when eyeballing your rent figure, think of the amenities of the property or unit in question. If there aren't any, you may want to consider investing in some that will up the property and rental value.
Amenities to a property are anything that increases its value and increases the value of the life quality for the residents.
These might be things like a pool in the backyard, a sauna or hot tub, or even a master bathroom suite.
If you are renting out rooms in a home, you might consider the size of the room an amenity, and have a different rate for each room in the unit.
Don't Overthink Amenities
Don't overthink amenities. You don't need a football field-sized pool in your yard to have an amenity to sell to tenants.
Other values such as gardens, updated appliances, size of the unit in square footage, and hardwood floors or plush carpeting may also be considered amenities.
You may also have that one beautiful feature of the unit that could be the one ticket that leads to lease applications being signed on the dot. That could be something like a walk-in-closet, a bedroom balcony, or even regular lawn maintenance to a garden lover.
If you don't have any amenities, consider investing in one simple one that will appeal to a wide market. Everybody loves storage space or a big closet, or an outdoor hot tub that you can keep if the lease doesn't work out.
If you are having problems with amenities, or still struggling with rental rates, consult an expert.
Invest in Experts
If you are having a hard time learning how much to charge for rent in California, start with averages and go from there. In 2017, the median rent in California began around $1,447.
Take into seasonal rates, your neighborhood rates, how old your building or unit is, and what your mortgage payment is. Then create your rent rate from there.
If you are still having problems finding that magic number that will book appointments and viewings, invest in the experts. Browse our listings and consider becoming one of them, and take advantage of experts that have been serving the San Bernardino, Orange, and Los Angeles counties for years.