By the end of 2023, rent for middle-tier apartments in Indianapolis was among the highest in the country. Prospective renters could see that trend in other cities throughout Indiana, where rent continued to rise post-COVID times.
If you're a new landlord in South Bend, you may wonder how you should price your property. After all, you want to make as much money as you can to generate more passive income. However, too high a rent can drive away new tenants.
Here are four rental pricing myths that can mess up your rental valuation.
Myth 1: High Rent Equals Higher Profit
The first mistake property owners make when renting out their property is charging the highest amount they can. Rental valuation does not only consider potential income but also occupancy rates. You make no money if your property stands empty.
South Bend's rental market is competitive, which means you always have to look for ways to stand out. One way to do this is by charging slightly less than the competition or offering different amenities.
Myth 2: Bigger Properties Are Worth More
Common rental market misconceptions include the idea that bigger properties will net more income. While square footage does have an effect on property value, it's only one factor.
Renters look for things like location, amenities, as well as the overall property condition. They want something worth their money. A smaller, well-maintained property in a nicer neighborhood often trumps a mansion in the middle of nowhere.
When you list your property, it's important to bring up all the favorable elements a renter can look forward to.
Myth 3: Rent Can Increase Every Year
Indiana is one of the few states that does not have any rent control laws to limit how high a landlord can raise rent. However, that doesn't mean you can generate more profit by taking advantage of this loophole.
As with initial pricing, making rent too high will drive away tenants. Current tenants won't want to renew their leases, and prospective ones will turn to more affordable options.
Myth 4: Managing Property Alone Saves Money
New property owners may believe the real estate myths suggesting they can cut costs by managing things on their own. However, the task can lead to unforeseen expenses and headaches.
Managing one property on your own is possible, but it requires a lot of time and effort. Property management tips and tricks will only get you so far, especially as your investment portfolio grows.
Instead of going it alone, rely on a property management company for their expertise and experience.
Avoid Rental Valuation Mistakes
Rental valuation is tricky but essential if you want to succeed in real estate investment. Doing it right will help you keep tenants, find new ones, and generate the passive income you desire. It may also keep you out of legal trouble.
PMI Michiana provides property management services for the South Bend area. With our help, you can access rental investment facts and all the assistance you'll need. Schedule a consultation today to learn more and tell us about your properties.
