Rental values are high, and if you’re renting out a home in the greater Cleveland area, you’re in a good position to ask for more in rent than you have in recent years.
That doesn’t mean you should over-price your home.
Finding the right balance is an important part of the leasing process. You need to price your home according to what the market will demand. Then, you need to consider the unique offerings of your property, its overall condition, and of course its location.
We’re sharing some of the best processes that professional Cleveland property managers use when we’re determining the rental value of your property. You can utilize these strategies if you’re pricing your own rental home.
Compare Your Home to the Cleveland Rental Market Competition
The market drives your rental value, ultimately. Before you can accurately determine the rental value of your property, you’ll need to understand what homes like yours are renting for around the neighborhood.
Start with a comparative market analysis so you’ll know how the local market values properties like the one you’re renting out.
Plenty of rental homes are listed online, and it’s easy enough to measure your home against those that you find currently for rent. However, remember that the numbers you find on rental websites aren’t always going to give you the complete picture that you need.
What you really want to know is what homes have recently rented for. This type of data can be accessed through a Cleveland property management company. The rents you find on Zillow or Zumper are a good starting point, but better data leads to more accurate rental values.
Cleveland Rental Values and Why Location Matters
Everyone knows that location matters when we’re talking about real estate. It’s all location when we’re buying or selling houses. Well, location impacts the value of your rental real estate, too.
Why does location matter when it comes to pricing your rental home? It matters because tenants are willing to pay more for homes that provide:
- A good, well-rated school district and local schools that are close.
- Easy access to commuter routes and highways.
- Proximity to grocery stores, restaurants, entertainment, and recreation.
- Safety. Tenants want to feel like they’re living in a safe, welcoming neighborhood.
- Access to trees, green spaces, and nature.
Your rental value may drop if your property is in a remote location that’s difficult to find or close to a highly commercial or industrial neighborhood. Expect to lower your price in order to find tenants faster. Other things that may drag down your rental value include a lack of parking, difficulties installing Wi-Fi or cable, high crime rates, and a neighborhood that lacks sidewalks, parks, and grocery stores.
Rental Values Reflect Property Condition
When it comes to establishing a rental value for your property, there’s not much you can do about the market. You have no control over the competing properties. Even the location is pretty fixed.
There’s one thing you can control when it comes to property pricing.
That’s the condition and maintenance of your investment.
Well-maintained homes rent for higher prices than those that are old, deteriorating, and in need of constant repairs. Tenants don’t want to live in a home where the walls have peeling paint and the appliances keep breaking down.
Upgrades, updates, and renovations always contribute to a higher rental value. While these might seem too expensive, choosing one or two minor cosmetic improvements will be an easy way to increase what your rental property is worth. Try to make a difference with:
- Fresh paint. Paint the inside of the home and check the exterior paint. It may need some sprucing up, or at the least, a power washing.
- Improved flooring. Carpet is an easy go-to when it comes to rental properties, but you might find you can really increase your rental value by tearing out that carpet and replacing it with hard surface flooring. There’s no need to overspend on hardwoods. Get some laminate or even vinyl floor coverings that will look good, reduce the amount of cleaning and maintenance that’s required, and raise your rental value.
- Better lighting. This applies to interior lights (especially in kitchens and bathrooms) as well as exterior lights.
- New hardware in the kitchens and bathrooms. Install new faucets, drawer pulls, shower curtain rods, and mirrors. You’ll be amazed at how new and modern your home looks
- Pretty landscaping. Keep it low-maintenance, but make it look nice. Your property’s curb appeal can have an impact on how it’s priced and whether tenants are interested in seeing it and renting it.
Improving your property condition will allow you to charge more in rent and remain competitive in the local rental market. Your home will be what sets the standard for other properties, and you might be able to nudge those rental values up even more.
How to Handle Rental Value Increases During Lease Renewals
Your rental value also matters when it’s time to renew your lease agreement. As your date approaches with your tenants, decide how much you’ll be charging when you offer a new lease. Most tenants will expect an increase of some kind.
While raising your rent is expected, you want to make sure you’re not making too much of an increase. You don’t want to shock your tenants into leaving the property and looking for somewhere else to live. You also don’t want to worry that it’s more than they can afford. Landlords don’t typically re-qualify renters when they renew the lease, but do you think they’re earning enough to meet the higher rental amount?
Do your market research. Raise the rent to keep your property within the market range, but leave a little flexibility so your tenants are incentivized to stay. They know it will be hard to find a property for less. Explain to them that the renewal rate you’re offering is a good value, and show them how much similar homes are renting for.
Establishing a rental value isn’t always easy, and we’re here to help. Please contact us at Avalon Group Realty. We can help you lease, manage, and maintain your investment property in the Cleveland metro area, including Kamm’s Corner, West Park, Fairview Park, Lakewood, Parma, Parma Heights, Bedford, and Bedford Heights.