When owning a rental property in Austin, Texas, or considering purchasing one, there is one factor that outweighs them all - how much can I charge for rent?
It’s the factor that will drive your reasoning for purchasing the property in the first place. You could have overpaid to acquire your rental home and received a bad deal, but if you can make more in rent than you pay towards your note every month then you are cash flowing!
The key to success - and way less vacancy on your Austin rental home - is pricing the property to be competitive in the market. Austin has no shortage of renters and individuals moving to the city every day. In turn, we live in one of the most competitive markets for landlords to own a rental property.
If you price your property’s rental rate too high you could risk sitting on the market as more accurately priced properties lease in a matter of days - sometimes hours! Let’s say your South Austin rental property can earn $1,700/month. Instead, you decide to have your property listed at $1,800/month and it sits for a month before it garners any real interest from potential renters. After just one month of sitting on the market, you’ve effectively lost money over the course of a year compared to leasing the property 30 days prior to the $1,700/month rate.
With that said, pricing your property too low on the rental market can leave you with more risk exposure to being hit by larger surprise maintenance costs, etc.
So how can Austin, Texas landlords accurately price their rental property?
There are a couple of ways to determine how much your property can earn in rent every single month. With that said, the most accurate way for landlords in Austin to correctly price their rental property in the Austin rental market is to run reports on comparable lease properties in your area.
Running comps will give you the best idea of what other properties in your immediate area of Austin are earning in rent every month. Targeting homes similar in size, # of bedrooms, # of bathrooms, and types of amenities and seeing how much they are asking for / leased for can give you a great idea of what your Austin rental home should earn in rent.
Using resources to look up homes for rent like Zillow and other sites can give you a great idea of what’s currently out there listed on the market. This can help give landlords an approximate picture of what other rentals in the area want to earn in rent. This doesn’t give you the entire picture though and leaves out a big piece of the picture - what the homes actually leased for.
To get the best, and most accurate idea of what your property can earn in rent every single month would be to work with an Austin property management company. Having access to the local MLS, Austin property managers can pull comps from past leases and show you exactly what properties in your area were able to obtain. Interested in learning how much your property can earn in rent? Claim your free Austin rental home market analysis from our team here at Stone Oak Property Management.
^^ Claim your free CMA Packet for your Austin, Texas rental home.