In the above section, we discussed the expenses of owning and operating a rental property, and how growing costs can create the need for raising the rent. If you try to charge a higher rent than comparable properties in your neighborhood, tenants will look elsewhere, your vacancy rate will rise, and your cash flow will suffer. Zillow provides data on past and current median rents by town, city, and state. Rent market trend data on the site includes important information such as:.
Rentometer indicates if the rent is too high, too low, or just right by comparing the current rent with other local properties. The free version of Rentometer provides basic rent information such as average and median rent, percentile ranking, map view, and sample size and radius. Rentometer PRO reports come in monthly and annual pricing plans and include comprehensive rent analysis data including:. Simply enter the address of any single-family home in the U.
Key metrics that forecast your potential return on investment include:. Of course, you can also personalize reports by adjusting assumptions to create customized analysis to match your investment objectives and strategy. As seasoned rental property investors know, the biggest risk in raising the rent is that the tenant decides to leave instead of signing a new lease renewal.
Even if you raise rent by just 2. Reasonable rent increases generally follow what the market will bear. While rents have historically gone up, even during difficult economic times, they may also go down for a short period of time. Charging the right rent helps keep your property market value growing, your cash flow strong and healthy, and helps to guarantee a good profit from your investment property.
There are no easy individual solutions to combating rising housing costs, Bachaud says. But one thing tenants can do is learn about their rights. Some local governments legislate how much notice a landlord must give renters of a rate increase, for example. Knowing about a potential price hike could help tenants negotiate a better deal or find more affordable housing.
Additionally, remote workers or those who can find a new job may also be able to relocate to a place where housing costs aren't rising as much , though that is not an ideal fix and won't work for everyone. It's also important to disburse the tens of billions of dollars in Covid-related housing relief that still needs to make its way to tenants and landlords, Bachaud says. Tenants behind on their rent can find information on their local rental relief program here.
That won't necessarily lower future costs, but it will alleviate some of the current financial strain. Sign up now: Get smarter about your money and career with our weekly newsletter. Skip Navigation. San Diego, CA. Anaheim, CA. Los Angeles, CA. Miami, FL. Huntington Beach, CA. San Jose, CA. Yonkers, NY.
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