Rental properties are on the rise, with more renters now than there have been in 50 years. While this is great news for landlords, it comes at a confusing time.
More than ever, Americans are struggling to pay rent, which has been steadily increasing for years. With so much pressure on renters, landlords have to think carefully about their prices. What do you charge your tenants so you can keep renters around while still keeping your own head above water.
Rental valuation is an option, but there are some things to know before looking into it. Many of the things you've probably heard about rent prices aren't true. We'll discuss these myths and the realities behind them here.
1. Landlords Control Rent
There's an image of a landlord in our culture as predatory and tyrannical. They're viewed as somebody who has the power to charge whatever they want for their properties and switch things up whenever they feel like it.
This isn't true. Some areas have rent control policies in place, although most states have stopped such laws from going into effect. Though Alabama is among the states where rent control is prohibited, other factors do affect rental prices.
Making rent prices too high can drive away potential renters, and you might end up losing money in the long run. While you can raise rent without giving notice in Alabama, it's not recommended.
2. You Can Evict Tenants at Any Time
It's a common misconception that there are no protections against eviction. Laws throughout the country require landlords to give a reason and a month's notice before evicting someone.
Eviction should be a last resort. Your tenants are out of a home and you're forced to find new tenants, so nobody benefits. You want to be cooperative with your tenants. Being reasonable will help you attract the best tenants.
3. Inflation Decides Rent
This myth is partially true. Inflation plays a role in deciding how much to charge, but it's one factor out of many. The job market, neighborhood attractions, and other factors play a role as well.
For instance, a luxury apartment in a small town might command less than a studio apartment in the center of a large city. Inflation is unpredictable and often changes at very different rates than property values.
4. Most Landlords Can Set Fair Rent Prices Without Help
Even if you do try to take all factors into account, figuring out rent is often difficult. For this reason, many landlords turn to a real estate agent or an accountant to help them.
You can also turn to a property management company for assistance. Helping landlords handle the day-to-day responsibilities of their property is their job.
Rental Valuation: Myths and Realities
Determining rental valuation has been the downfall of many landlords. Various aspects of a neighborhood can raise or lower the average price of a home or rental unit. We've dispelled a few myths about rent prices here, but there's more to know.
You'll find more information on our blog. If you're looking for a property management company in North Alabama, read about us at Property Management Inc.
