Key takeaways:
- Detailed breakdown on how to set rental rates and increase them.
- Associate with professionals who can help you manage your rental property and ensure you don’t have to go through the hassle.
About 26% of landlords in the UK reported making a profitable, full-time living in 2023.
Do you fall in this percentage bracket?
If not, is there a rental rate issue making it difficult for you to cover your expenses and book profits?
You must know how to price your rental property for your tenants.
Once done, you should understand the rent increase strategies to cover the inflation and manage your expenses with time,
So, without further ado, let’s go through the details to ensure you earn profits.
4 Factors You Should Consider Before Setting Rent Expenses
You must know what your expenses are. From mortgage payments to property taxes, from building improvements to maintenance costs, there are multiple expenses you must track.
Also, ensure that you cover your expenses at the bare minimum with your rental income. Here are four factors to consider that are important to set your rental rates:
Know the average income of the area
You have to research and know the average income of the area where your property is located.
How can it help?
It can give a brief idea on the ideal price you can set for the people of the location, which is suitable based on their income.
The right estimation can help you get a steady stream of ideal tenants to lease your property.
Do you know what’s the icing on the cake?
There’s a high guarantee that you’re getting rent paid on time without getting into finance-related troubles because of your tenants.
Research the nearby rentals
Knowing what your competitors are doing helps you get an extra edge over others.
Understand what amenities others are offering and what they are charging for rent. Some landlords also focus on the national averages for rental rates; you can also follow that strategy, but tailoring down to your nearby rentals can give you a more accurate picture.
Your rental pricing should also complement the services you offer to your tenants. Maintain the balance and don’t overcharge or undercharge them to attract more leads.
Is your property seasonal?
Depending on the location of the property, the demand for your rental can be seasonal. Rental property demand in the UK is highest in the summer and spring and dips in the fall and winter.
When demand is high, you can increase rental rates by 10%. In the next section, we’ll discuss more about how to increase rent.
Alternatively, if you find it hard to fill in the vacancy during the winter months and don’t want to wait till the season, you must lower your rental prices or offer other incentives to encourage renters.
Check area demand
Different areas have different rental property demands. If your neighborhood is located in the heart of the city, it will have a high demand.
Also, if your city attracts businesses, college students, or travellers, you get a lot more lead enquiries than a city without these factors.
Once you check the demand, you can easily price your rental and earn decent profits from your rent amount.
Tip: If your rental pricing isn’t competitive compared to other rentals and you want to increase your monthly rental amount, you can add more amenities. But remember, increasing amenities requires more maintenance.
Now let’s go through the top rental increase strategies you can use.
3 Rent Increase Strategies You Can Use
There are many proven strategies that you can use to increase your property rent, but here are the most effective ones:
Improve the property appearance from the front
Do you know that people decide about you in the first seven seconds?
You have a limited time to leave a good first impression.
So, why not ensure your rental property is good in the eyes of the prospect? Address the nitty-gritty details, like painting the door, mowing the lawn, or replacing the mailbox or address numbers with finesse.
Advertise smartly
You can’t rely on putting a signboard to ensure you have decent lead generation results.
You have to follow the modern advertising strategy and build your presence online. Choose different platforms that can help you market your rental property to increase lead generation.
Don’t start with a low price
You don’t want to start with a low price for your rental property. Once you do it, you might get stuck with it.
It can result in lower profits, and you can drain money rather than gain. So start near the top of the range, which you think is ideal for your rental.
If you feel that it’s too expensive, slowly slash the rates or offer incentives to ensure that you reach the ideal pricing.
Following these aspects can be overwhelming. That’s where you can trust Pluxa Partners.
Pluxa Partners Got You Covered
As one of the leading property management service providers in the UK, we at Pluxa Partners understand how to manage your property and set ideal pricing.
Our team knows the ins and outs of handling dynamic rental pricing based on your multiple factors.
Apart from the pricing, we can handle end-to-end property management to ensure you don’t have to go through the hassles.
So, what’s making you wait?
Contact our professionals, who can assist you with rental pricing.
FAQs
What is the formula for the rental rate?
To calculate the rental rate, use this simple formula: Rental Rate = Total Costs + Desired Profit.
How much rent should you increase on an annual basis?
In the UK, rent can be increased by 2-5% annually. This can help you handle inflation and keep up with rising operational costs.
