Experts are asserting that now's the best time to invest in real estate. If you've got a property in Seal Beach, CA, now might be the best time to rent it out to build a lucrative income.
But before you do, you might be wondering how much you can charge as the rent price. This guide will bust a few myths about rental property pricing so you can decide how much to charge.
Here's what to know about rental valuation:
You Can Charge Any Rent Price You Wish
Can you just charge whatever rent price you wish? California does have rent control laws. This means that there are limits to how much a landlord can raise rent costs.
Make sure you also consult an attorney to learn about any potential local laws that could affect rent prices.
But what about how much you charge as the initial price? You'll have to look at similar properties in Seal Beach and charge accordingly.
Let's presume you own a two-bedroom house. You have to charge within the range of the average price. If you wish to charge a higher rent price, you'll have to justify it.
If your tenants have pets, you can consider raising the rent to accommodate any potential damage.
Inflation Increases Rental Value
Is inflation a good reason to charge a higher rent price? Many landlords may feel the need to raise rent to assist with the increased cost of living.
If you set high rent prices due to inflation, you can expect to lose potential tenants. If you raise rent due to inflation, tenants may not wish to renew their lease.
You Can Charge Based on the Type of Tenant
Another common myth is that you can charge rent based on what kind of tenant you find. For example, you may wish to charge more to a working professional compared to a student.
But your rental valuation is based on your property alone. If your property is near the beach, you can charge a higher price. But the price will be based on the location, not the tenant type.
You Can Raise Rent Based on Income
What happens if your tenant gets a raise at their job? Does this mean that you can raise their rent?
While they may agree, this isn't always the best idea. Tenants may feel you're taking advantage of them. Even if they're earning more, they'll only want to pay for what they feel the property is worth.
That's How Rental Valuation Works
Now you know how rental valuation works and the myths surrounding rent prices.
The first myth is that you can charge as much as you wish. You have to charge around the average price of similar properties. You can raise your rent price in certain cases.
You also can't raise the price because of inflation. Likewise, your rent price can't increase because of the tenant and how much they earn.
If you need help with renting your property, PMI Patron has over 20 years of experience. Reach out to us today!
