It can be tricky to determine how much to rent your Phoenix house for, no matter how experienced you are. After all, if you ask for too much, you risk extending a vacancy and having no tenants willing to pay up. But if you ask for too little, you risk selling yourself short and not maximizing your ROI.
And so, you likely find yourself asking, “How much can I rent my house for in Phoenix, AZ” too many times to count.
Luckily, there are some strategies that you can use to figure out just how much you can lease your rental property for in Phoenix. And the best part is, once you’ve set a rent rate, you can rest assured that both you and your tenants will be happy.
How Much I Can Rent My House For in Phoenix?
1. Check Your Home’s Value
Typically, the more valuable your investment property, the lower the rent rate will be. Of course, this sounds counter-intuitive. However, the more valuable your property becomes, the easier it becomes to out price prospective tenants in the area.
Just because your Phoenix house cost a lot to buy, doesn’t justify an inflated rent rate, even if you need to cover the mortgage each month. In fact, the only way this would work is if your rental was in an affluent area and had the amenities to justify a high-priced rent rate.
Because of this, it’s best to set your Phoenix property’s rent rate between .08% and 1.1% of the purchase price. In other words, a property you bought for $100,000 would likely easily rent for $1000 per month.
2. Compare Your Property to Similar Properties in the Area
Just like your potential tenants will conduct research in regard to typical rent rates, you should too. After all, no one is going to willingly overpay if they can get a better deal elsewhere for a comparable property.
Even if you think you know what your Phoenix rental is worth, it’s a good idea to check out other listings in the area to be sure. And when you do, make sure to compare features such as square footage, amenities, layout, and floor level. And don’t forget services provided such as parking, laundry, and landscaping.
Knowing how much nearby rentals are going for will help you price your own property in the sweet spot. Doing this will help you attract high-quality tenants willing to pay what you’re asking for each month.
3. Analyze the Location
As a Phoenix landlord, it’s likely you’ve heard that location is one of the most important things to think about before buying an investment property. In addition, it’s one of the biggest factors to consider when deciding how much to rent your property for.
If your property is in a prime location, nearby restaurants, shopping, entertainment hotspots, schools, and places of employment, you’ll be able to bump up the rent rate higher than average.
People are always looking for a place to call home in areas that have everything they need just around the corner. If, however, your property is on the outskirts of the city, you may find it more difficult to set a high rent rate.
4. Consider Your Amenities
If you’re a landlord wanting to increase and collect more rent for your Phoenix property, you’ll have to offer more than what similar rentals are offering.
Tenants are looking for more amenities than ever these days. And these are the things you should be advertising in your vacancy ads. For instance, they’re looking for energy-efficient appliances, pools, indoor gym, beautiful landscaping, fresh paint, upgraded flooring, and much more. Luckily, any upgrades you make to your rental property have the potential to boost your rent rate.
The problem is, knowing which renovations will have the highest impact on your bottom line can be tough. That’s why contacting a local property management company and [cta]getting a FREE assessment of your rental property[/cta] can help. An experienced property manager will be able to help you choose the upgrades that will make a difference in your rent rate, without hurting your annual profit.
5. Look at Your Pet Policy
50% of tenants own pets. Another 35% of people without pets claim they’d gladly get one if their landlords allowed them.
The truth is, people love their furry friends nearly as much (and sometimes more!) than their human counterparts. And if you don’t currently allow pets in your rental, you could be losing money.
When it comes to setting a rental rate for your Phoenix property, it’s the small things like allowing pets that can make a big difference in how much you can ask for. And the great thing about allowing pets is that you can charge a pet fee each month and make even more money than if you didn’t allow pets at all.
6. Think About Your Expenses
Unless you were able to buy your rental property with all cash and have a ton of reserves on hand, being a landlord can be expensive. And while you can’t overly inflate your rent rate to cover all your expenses, you must factor in how much you need each month to pay the bills.
Make sure to include expenses such as:
- HOA fees
- Property taxes
- Insurance premiums
- Maintenance and upkeep
- Emergency repairs
- Property management fees
The whole point of being a landlord is to generate a profit. Though you should definitely crunch the numbers before you buy an investment property, doing so routinely afterward is just as important. You want to make sure you set the rent rate that will make your tenants happy and your bank account full.
7. Use a Phoenix Property Management Company
If you find yourself asking, “How much can I rent my house for in Phoenix?” more times than you’d like, it’s time to invest in a high-quality property management company to help.
Determining the right rent rate can be a complex process. There are many things to think about such as current market rates, location, demographics, lease provisions, and even the amenities that are in demand right now.
With a qualified Phoenix property management company on your side to help, you’ll find your rental property business booming in no time. So, get in touch with Stratton Vantage today and see how we can help.
Not only can we help you set the perfect rent rate, but we can also help with all other aspects of managing your property. From tenant screening to property inspections, and rent collection to maintenance and repairs, we can help you place tenants in your property that pay the highest rent possible, and help you achieve your financial dreams.