It can be difficult to establish the correct rental value for a Los Angeles property, especially when owners believe they can charge whatever is required to cover their monthly mortgage, taxes, and insurance expenses.
You have to be realistic. The market drives rental value, and overpricing your property will only result in a larger vacancy loss.
At EGL Properties, we use reliable data that we consistently gather on the Los Angeles market. We compare your property to similar homes in the neighborhood, arriving at a rental price that’s both profitable and competitive.
Several things influence what you can charge, and the more you know about what goes into determining the value of your rental property, the more prepared you’ll be for the rental market.
Consider Your Los Angeles Rental Property’s Location
It’s well-known that location is an important factor in real estate, and properties in desirable locations will rent for more money than those in remote areas or unpleasant neighborhoods. You can maximize your rental value when you’re near good schools, close to the main commuter freeways, and it’s easy to get to shops, grocery stores, and retailers.
When you’re comparing your home to the competition in order to price it accurately, make sure you’re looking at homes in the same neighborhood as you. Rental prices in Los Angeles can change from street to street and block to block.
Property Size and Condition
Single-family homes often earn more rent than apartments. Most renters in Los Angeles and the surrounding communities are either looking for low-maintenance two-bedroom condos or single-family homes with three bedrooms, two bathrooms, a garage, and some outdoor space. You’ll need to lower your price a bit if the property is too small for the area or even if it’s too large. It’s rare to find a long-term renter looking for a studio or a seven-bedroom home.
There’s not much you can do about the rental market, and you only have so much control over your property’s location and size. However, you can control its condition. Well-maintained properties will earn more rent than those that are old, worn, and falling apart. Make sure your home is in excellent condition when you’re renting it out. You’ll earn higher rents and attract better tenants. If your property needs work, get that done before you set a rental price.
Seasonal and Economic Factors in Pricing
To further prove how little owners actually control what their rental homes are worth, seasons can affect what you earn, and so can the local economy. Most renters are looking for new homes in the spring and summer, especially if they are in school or they have children who are in school. Therefore, you might be able to charge a bit more in April than in December. It’s hard to rent a property for top dollar over the holidays.
Economics also comes into play. When there’s too much inventory and no one is looking for a home like the one you’re offering, you’ll have to drop your price in order to find a tenant. However, when the market is strong and your property is unique and in demand, you’ll be able to charge more.
You need professional expertise and data in order to effectively and accurately price your rental home. Contact us at EGL Properties for any help with Los Angeles property management and leasing.