Thinking of listing your Council Bluffs rental on the rental market? If so, the first thing you'll need to decide is how much to charge for rent.
For new landlords, this can be a tall order. Rental valuation is a complex subject you can approach from many angles. If you don't do your research, you'll likely fall for one of the many myths surrounding this process.
Want to ensure you'll price your rental fairly? We'll help you out by debunking some of the most common valuation myths people still believe!
You Can Charge Whatever You Want
The most common valuation myth is that you can set your rent as high as you want. In theory, this may be true. If there are no other rentals around you, the laws of supply and demand allow you to set a high rent price.
In reality, of course, this rarely happens. If your local competitors offer better rent prices, expect to get very few viewings.
Rent Depends Solely on Inflation
Inflation can be a key factor in pricing your rental property. However, it's not the only economic event that affects rental valuation. As a result, relying on the expected inflation rate to set your rent isn't a winning strategy.
If you rely solely on the inflation rate, your rental will likely end up over or under-priced. The former can lead to rent collection woes, and the latter may have potential renters believing the rental is sub-standard.
You Can Raise Rent at Any Point
Technically, Iowa law allows landlords to increase their rent to any amount. That said, the lack of rent control doesn't apply to your lease agreement. During a fixed-term lease, you can't raise rent on a whim.
Even if the lease agreement allows for a rent raise, you'll still need to provide notice. In Iowa, you must give tenants a written 30-day notice before you increase their rent.
Rental Value Is Set in Stone
Your valuation strategy can and should change over time. For example, let's say a competitor lists their rental at a lower price than yours. In this case, you may lower your rent to make your property more appealing.
There are plenty of other market trends that may require you to stay flexible with your pricing strategy. Keeping your rental value set in stone while your competitors are making moves is unlikely to end well.
You Don't Need Professional Advice
Many new landlords fall for the trap of thinking they know their property best. Though this may be true for the rental itself, its value is a different story. Even if you do your research, it's always helpful to get a second opinion.
This is where a good property manager can come in. When they run a data-driven rent estimate, you'll get a clearer view of what your rent should be.
Rental Valuation and You
In the long run, all of the above myths can be dangerous to your rental valuation strategy. Instead of using them as a yardstick, rely on research, common sense, and professional help.
Interested in property management services in Council Bluffs, IA? Our experts at PMI of the Midlands can help! Contact us here to find out why we've been in this industry for over 20 years!
