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Determining how much someone is going to be willing to pay to rent your investment property has become increasingly more accurate. Rental Value in Tampa Bay can be hard to determine if you are just looking on the web.
Our current software compares actual rental rates of comparable properties in the local area. The software company has many clients and can run generic reports for actual market value and rental rates. This is superior to an estimate on Zillow, Craigslist or other listing services, because you find out what people are actually paying, rather than what a property is listed for.
There are many factors involved, but no one really knows how much someone is willing to pay until they actually pay it. Then that is how much it is worth.
For example, a property may be listed for $1500 per month, but then the owner may cut a deal and end up renting it for $1300 per month. All listing sites have to go on is the $1500, not the $1300, so you may find your expectations are higher than they should be and you may end up sitting with a property vacant for longer than necessary. This can work in the other direction with finding that some properties may be underpriced. Reports should be run on your existing portfolio to determine if your rental rates are keeping pace with the current market. There are many factors involved, but no one really knows how much someone is willing to pay until they actually pay it. Then that is how much it is worth.
Many properties are advertising top rents and have been on the market for over six months by their Tampa property management company. From a simple investment standpoint, 6 months of vacancy is going to cost a lot more than renting the unit for $200 less.
Example: asking rent $1500 per month. Vacant six months. $1300 vacant one month. Over the five months, the unit was rented, the owner collected $6500. Would you rather your property manager make you feel good, tell you your property is great and that they are ‘connected’ and can get top rental value. Or would you like the $6K in your account?
In the current market, there are record numbers of bank-owned properties, that means record numbers of displaced people. Since supply is low, demand increases and rates are expected to increase. rent hikes
The vacancy will kill your portfolio.
This way the market determines the maximum amount that your property will rent for.