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What determines rental value?

Our Property Manager Melanie Schott shares her insight on the rental market prices in the northern suburbs.

I’ve worked in real estate for over 20 years. Five of those years have been living and working here in the northern suburbs. Property management has been my focus here at One Agency Downie & Denison-Pender.

I know the biggest question residential landlords have is how much renters will pay for their property.

Typically, the defining criteria on price are the number of bedrooms and whether the property is a townhouse or a free-standing home (flats aren’t a common option here in the northern suburbs).

From there, a renter might typically start to way up value based on other factors like the condition of the property; distance from transport, schools and amenities; the size of the rooms; the distance from the beach; inclusion of a pool, and so on.

Despite the variation in properties available though, there is always are general price guideline at any point in time. What was the average price this time last year doesn’t necessarily have a bearing on this year’s price.

4-bedroom pricing is the most difficult, given the wide-ranging options available. A pool often lifts a property price by well over $100 pw. Renters will also pay more for sea views, a large backyard, sizeable living areas and modern interiors.

My strongest advice to any new landlord is compare, compare, compare.

Researching the competition and pitching your price squarely inside the range on offer at the exact time you’re listing is the best start to finding the right tenant quickly.

Renters approach properties differently than buyers, without as much emotional investment in the process. Price is a defining factor in their decision, so you need to be price competitive.

This is particularly true now, given there are more rental options available than what there were even six months ago.

Keep in mind though, just because a tenant is willing to pay that price, doesn’t mean they are the right tenant for you. Naturally, I think an experienced agent knows how to probe for the best insights into prospective tenants’ rental and work history to make sure you pick the best tenant for your property.

Do get in touch if I can help with your rental property.

Melanie

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What determines rental value?