There are two important things for landlords to consider when pricing their property: maximising their yield and minimising their void period. This means choosing a rental price can be a tricky business…here are some things to help:
1. Look around you: what are similar properties going for in the area? Don’t just judge on number of bedrooms, look at the quality of the furnishings and the unique selling points of each listing – does your property match up to them? Set up a property alert on Rightmove for similar properties in your area – see how much they are going for.
2. Don’t be overly ambitious: setting your rent too high will see your property sit on the lettings sites for weeks, with few enquiries coming in and your void period mounting. Set your rent more reasonably and you’ll have more enquiries and you’ll let your property quicker (minimising the void period).
3. Don’t be overly negative: setting your rent low will see you inundated with tenant enquiries which is great! However, you won’t be maximising your yield and the type of tenant enquiring might not be what you’re after. A quick let is great, but don’t price so low that you’ll lose out in the long run.
“Consider the effect of lowering your rent on void periods” advises James Davis, CEO of Upad. “If it keeps your property fully-occupied, you could actually be better off in the longer term charging a lower amount, than holding out for the full amount but having a couple of months where you earn nothing at all. Tenants charged a lower rent are likely to stay longer.”