How Much to Charge for Rent: Rental Income Basics for Auckland Property Management
It’s important to have an accurate rate when you’re deciding how much rent to charge for an Auckland investment property. If you don’t price your property correctly, it can lead to financial consequences and undue stress.
Pricing Your Auckland Rental Property Too High
One of the problems we often see is that properties are advertised with unrealistic prices. These properties are listed with rents that are too high. Prospective tenants are looking at all the available listings and they’re comparing prices and properties. It’s going to be obvious if your property is priced too high, and those renters will turn their attention to your competition. This leads to vacancy and loss of rental income, which is incredibly stressful.
Pricing Your Auckland Rental Property Too Low
Another issue we see is the reverse of high rents. These are the properties that are advertised too low. When you price your property lower than you should, it leads to an investment that is under-rented. The property doesn’t achieve market rent, and the owner will forgo reasonable income. The cumulative effect of that, particularly in Auckland, which has the highest rental rates in the country, could mean a loss of thousands of dollars over the life of the tenancy. There’s a correlation between rental rates and capital value for a property. If a property is under-rented, there is potentially a capital value decrease.
Identifying Accurate Rental Prices
So where can people go to identify the right rent? A great place to start is the Department of Building and Housing website. This resource has statistics that are updated every month. It will tell you how much properties have been renting for. You can drill down into specific suburbs, look at subject properties, and sort according to how many bedrooms the property has. It’s a great and relevant source of information. Trade Me is another good place to go because it shows current listings. Just compare your property to those that are similar so you get relative and accurate information. Property managers do have the upper hand on this topic. We can look at existing listings that we have set up and give you an ideal rental range for your investment.
This is just a little bit of information on choosing the right rental amount for an Auckland rental property. If you have any questions, we’d love to help you and tell you more. Contact us at Walker Weir Property Management in Auckland, NZ.August 11th, 2016