Rents have been going up steadily in Nashville, and that’s good news for owners who have a home to rent out.
To calculate how much rent to charge for your Nashville investment property, you’ll need to study the market. Get an idea of what homes similar to yours are renting for. Then, compare your homes to those. Is there any reason that you might have to charge a bit less or maybe a bit more?
Ultimately, the Nashville rental market drives your rental value. Here’s how to decide what you can charge.
Comparative Rental Analysis in Nashville
Before you price your own rental property, take a look at what other homes are renting for in your neighborhood. Many Nashville property managers will be willing to offer a comparative market analysis (CMA), which is an excellent resource to help you establish the right rental price.
An effective analysis can take a look at competing properties in the area and establish a range.
Ideally, you’ll have a property management expert evaluate your home in person. Sometimes, a kitchen upgrade or a flooring selection will make a difference in what you can ask. Providing a washer and dryer, for example, can sometimes raise your rental value. If you’re including landscaping and pest control in your rental price, it should be higher. The rental analysis will look at all the homes and establish a range, and then consider those things that set your property apart.
You can look at online listings to get an idea of what properties are renting for, but make sure you’re using reliable data. Large third-party data aggregators using algorithms as the primary mechanism to establish rental rates can be very unreliable and inaccurate sources. A Nashville property manager who really knows the market and the math can help you establish the best rental value.
Property Condition and Rental Pricing
You can’t control the market, but you can control how attractive your property is to potential renters.
Well-maintained homes are always going to rent for more, and if you’re willing to invest in some simple upgrades and updates, you can ask for higher rents. Some of the most cost-effective upgrades that impact your rental price include:
Fresh paint and trim
Hard surface flooring
Great interior and exterior lighting
Smart home technology
These things won’t cost you a lot, but they’ll increase your rental value and your ROI.
Price your Nashville Rental Property to Avoid Vacancy
Vacancy is one of the most frustrating ways that owners and investors lose money on their rental property.
While no one wants to price their property too low, it’s also rather important that you don’t price it too high. If you’re outside of the general market range, you’re going to have an unoccupied property that is costing you money instead of earning you money.
Price your home for profit, but don’t forget that tenants today are savvy. They know what the market demands and they won’t even schedule a showing if your home’s price tag is too high. Holding firm at a rental price that’s $100 over the market rent will result in thousands of dollars of lost rent.
We can help you when it comes to pricing your Nashville rental investment. For a detailed market analysis and our best recommendations, contact us at Omni Realtors & Property Management.