One of the most satisfying parts of being a rental property owner is receiving ongoing income (rent) from your tenants. But even if you have the ideal renters whose payment(s) arrive like clockwork every month, is the dollar amount you’re charging them too much or too little?
“Market rent” is the amount of rent that you can ask for at a given time. Just like the economics of supply and demand with other products and services, the rent that is charged (and received) is typically determined by how much tenants in your specific locale are willing and able to pay.
HUD (the United States Department of Housing and Urban Development) estimates fair market rents on an annual basis, and more detailed information can be found regarding fair market rent by geographic location and year by visiting HUD’s website.
Charging a tenant too much rent could prompt them to look for other living options, in turn, causing you to have to re-market the property and go through the whole screening process again with potential new occupants.
On the other hand, asking for too little rent may be an incentive for your current renters to stay in your property longer, but can also lead to a tighter bottom line in terms of your real estate investment income. It can even disincentivize you to make various repairs and upgrades to the property, given the lower amount of incoming cash flow.
In any case – regardless of whether the rental income you receive is high or low – managing tenants and maintaining properties can be hard work. But the effort that is put in doesn’t necessarily have to be all yours.
Hiring a professional property management team can free up much more of your time to do other things, while still generating incoming cash flow and benefitting from rising equity. To find out more about how an Orlando / Central Florida property manager can help you, just contact us today for more details.