Are you ready to start renting out your Merced, CA property? From the wildlife refuge to the local antique mall, this Golden State hotspot is a great place to attract tenants and earn a passive income!
As you get started, one of your first steps will be pricing your rental. While this process might seem simple enough, it's easy to get led astray by inaccurate information, especially given the amount of data shared online.
Rental valuation doesn't have to be complicated. Today, we're setting four key myths straight and sharing the facts that landlords need to know.
1. You Have Full Pricing Freedom
When it's time to rent out your Mercad home, you can go wild and choose a high rent price, right? Not quite.
While you might have that ability, it's all too easy to price yourself out the local market, even in a popular city where rates tend to be higher. To attract the best tenants, it's smart to keep the rule of supply and demand in mind.
Consider the size of your property and the number of amenities you can offer. Then, research what nearby rental homes are going for in the area. The price you choose should be fair and comparable.
2. Inflation Is the Only Factor That Matters
You likely hear it all the time as a landlord: Inflation is the only true metric that determines your rental valuation. While this is one of the economic factors to keep in mind, it's not the only one to think about as you price your rent.
Basing your numbers off inflation alone could mean over-charging or under-charging for your property. Remember to take a comprehensive view of the local rental market before making this important decision. Hyper-focusing on one aspect could mean missing other key factors, such as fluctuations related to seasonal demands.
3. You Don't Have to Tell Anyone When You Raise Your Rent
Your space, your rules. While this might be your mantra, it's important to know that you can't simply raise rent any time you want to.
Instead, most jurisdictions require landlords to give their tenants advanced warning when they're about to impose a rent increase. Even if this isn't mandated where you live, it's still smart to give everyone a heads-up. This type of courtesy can go a long way toward strengthening your tenant relationships.
Some states also limit how much you can raise your rent in a given period. In California, the Tenant Protection Act prevents landlords from imposing a rent spike of more than 10% (or 5% plus the cost of living changes, whichever is lower) over one year.
Find Help With Rental Valuation
With so many factors to calculate and considerations to remember, it's easy to get off-track with your rental valuation. Yet, this is only one of many responsibilities that landlords must juggle.
Our team can help you navigate the ins and outs of rental property management, from marketing and tenant screenings to rent collection, maintenance, and evictions. To learn more, reach out to us today to schedule a free rental analysis!