There are plenty of stories out there of properties that are overpriced for their markets—but the opposite can be just as bad for your long-term wealth! If you’ve been pricing your investment properties in Washington DC without the aid of some market research, you may have been losing out on valuable income.
Finding the bullseye price of your investment properties is one of the first things we like to do for the investors we work with here in our nation’s capital. As an expert property management company in Washington DC, we use our Rental Price Analysis to determine if you’re maximizing the true value of your portfolio.
For investors who are just starting to grow their portfolios, underpricing your rentals can have some unintended consequences—especially for investors with narrow profit margins. Consider the real-life example of property investor Holly Johnson from Indiana:
“…I had based the rental price [of our investment property] on our old mortgage bill—not the new one. So, for the first year we rented that home, we merely broke even instead of pulling in a profit. Fortunately, we were able to readjust the rent and raise it to take the higher property taxes into account once the first year’s rental lease came to an end. Lesson learned there, but it was definitely learned the hard way.”
While setting your rental rate is ultimately your choice as an investor, as an expert property management company in Washington DC, we stand behind our bullseye pricing system.
Your portfolio is your ticket to financial freedom through Rent Estate™! Underpricing your units for the market only denies you the income you deserve—and you shouldn’t have to learn the hard way! Take a lesson from Holly when it comes to your rental rates and price accordingly.
How Can You Tell If Your Rate Is Too Low?
Consider, too, that setting the wrong rate for the neighborhoods that your investment properties in Washington DC are located in can even scare off good tenants! How often have you considered a purchase before turning it down because the price seemed too good to be true?
- A flurry of applications paired with pushy tenants trying to muscle in on a perceived deal is a good indication that your properties are probably priced too low.
- It’s easy to be wowed by the number of applications you receive—but don’t let that fool you. It’s not always a good thing.
- When it comes to tenants, quality over quantity is always best! If you’ve been underpricing to attract more tenants, this strategy can introduce risk to your investment portfolio.
Screening your potential tenants should always be your primary means of protecting your investment properties in Washington DC—but setting the right price for your properties from the start makes it clear that you understand their value.
That said, there is a right and wrong time to raise the rent for your portfolio. Keeping this in mind can mean the difference between holding onto any good tenants you’ve found or losing them when lease renewal time rolls around!
Fix Your Rent Rate Once You’ve Found Your Bullseye Price
Even if you’ve underpriced your rentals, once you discover this, you can adjust accordingly. It helps if you already have rate increases specified in your leasing agreement. This ensures transparency for your tenants and makes it far easier for you as the investor.
If you haven’t taken this step, you’ll need to wait until the lease plays out to adjust the rate. Increasing your rate to meet the demands of the market is best done slowly, especially if you have good tenants worth keeping! Surprising your tenants with a steep increase is an easy way to lose reliable renters. When you add up what vacancy would cost you as an investor—paired with the added expense of making your property ready for the next tenant—consider if a quick increase in your rate is worth it.
Fortunately, you don’t have to go through this step alone! When you work with an expert property management company in Washington DC, you gain a professional partner. As a seasoned veteran, your property manager knows how to keep your properties profitable! They’ll not only run the numbers with you to find the bullseye price for your current properties, but they’ll help you enact a plan for how to raise your rent rate to meet it.
Working with a property manager before you buy is a great way to ensure you not only have the right rent price—but that you have the right property to maximize your ROI from the start. Whether you’re buying a new investment property or increasing the rent on one you already own, work with the professionals in property management!
A FREE Rental Price Analysis from the Professional Landlords at Renters Warehouse DC/NOVA is the right tool for the job. There’s no reason to deny yourself the income you’ve been missing from your rentals! Let us show you what your properties are truly worth!