Selling or renting your property is very important, especially for investors who desire to generate income from an investment return. Long before you start thinking about presenting your property for sale, finding the right agent, or putting up a ‘For Rent’ sign, you will need to have an idea of how you are going to price your property. There are, of course, many factors that you need to consider before you sell or rent your property. However, the single most important factor to consider is that you have priced it correctly. There are important factors to consider ahead of setting a price for sale or rent.
One thing you should avoid is overpricing your property because you are going to lose the property’s appeal within the first two or three weeks of viewing. Yes, you can drop the price later, but by then it will be too late. In fact, you should not worry about pricing your property too low because property priced below market value often receive numerous offers that will drive the price back up. Remember, pricing is all about supply and demand. So make sure you or your agent can do a great job of figuring out how to price your property. However, if you want to rent out your property, accurate pricing is crucial to attracting prospective tenants. To do that, you will need to prepare a comparative market analysis.
To know exactly how much your property is worth, look at similar properties listed in the same area as your property over the last three months. You could use various websites to do this, but if you are not sure, it might be better to find a home appraiser who can give you a more accurate assessment of what your property is actually worth. A home appraiser can find out how much a property is a worth based on the condition of the property, local property sale prices, and location. Compare similar square footage within a 10% variance up or down, pay attention to neighborhood physical barriers (such as major streets and railroads), and compare similar ages.
For renters, the amount of rent you can charge your tenants is usually a percentage of your property’s market value. Other than your property’s value, you also need to consider what other landlords are charging for a similar property in your area. Finding a tenant can be very hard if your rent is unreasonable. You can get a realtor’s opinion or even check out some of the property in person, but the easiest way to know how much other landlords are charging is by utilizing Fazwaz’s “property for rent” tools. Things you need to consider while comparing a neighborhood, number of bedrooms and bathrooms, as well as new or old construction.
You should also adjust the price according to the amenities available. Unless the property you are comparing is exactly the same, setting a standard price for all similar properties can actually be bad. You should charge slightly different rent or sale prices based on the amenities. You can set your price based on several factors, including views, square footage, floor level, layout, updated appliances, as well as extra closet, balcony, or window.
One last thing for you to remember is that setting a price for sale or rent is not a one-time event. Property values can increase or decrease. Therefore, you need to constantly look at the market so you can adjust the price based on demand. In a balanced market, you may need to begin with setting your price at the last similar sale and then adjusting it for the market trend.