How to Set a Rental Price like a Professional Boston Property Manager
On our blog today, we want to help you set a rental rate just like a professional property manager in Boston. At Hancock Realty Group, we like to use the absorption rate analysis technique. In our experience, this has been the best way to successfully price a rental property.
This is essentially a fancy way of saying let’s look at the data for the last six months or four months, right up to today when you’re putting your property on the market. As we talk about pricing, we will use a two bedroom unit as example. One of the key things to do when using this technique is to make sure that you create a submarket, and as you are creating that submarket, draw a radius around your property of two or three miles, tops. If you go beyond that distance, you’re looking at a different school district and probably an entirely different community. The goal is to compare apples to apples as best you can.
Once you have your submarket identified, take a look at the two bedroom properties currently available. You also want to look at the two bedroom units that have rented in those last four to six months, and consider how long it took for those units to rent. You need to know how long they were on market. Figure out how quickly those two bedroom properties were absorbed by the market, or taken off the shelf.
When we analyze these two data sets – how many two bedroom units have been on the market and how quickly were they rented – we are able to establish an ideal price. That information is going to give you a good idea of what the appetite is in that submarket for a two bedroom property.
If you’re attempting to put a price on your rental property and you’d like some help in analyzing your own data, contact us at Hancock Realty Group. We’d be happy to assist you.