How to set a rental price in today’s market

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High interest rates have driven activity away from homeownership and back towards the rental market. While this can be good news for landlords, caution should still be applied when setting the right rental price.According to the PayProp quarterly Rental Index for Q2 2023, “n pure pricing terms, the national average rent for this quarter was R8 375, up 4.4% from R8 032 in Q2 2022.

“While the demand for rental homes remains high across the country, landlords will still need to secure a reliable tenant to avoid the risk of missed or late payments. If a rental price is set too high, this will likely deter sensible tenants and could put landlords at risk of signing a lease with a tenant who actually cannot truly afford the rent,” Goslett cautions.

“Based on a rental agent’s research and comparative market analysis, a competitive rental price can be set. This should be in line with the market and the broader economic conditions but should also reflect the unique features and condition of your property,” says Goslett.Location is one of the most significant factors affecting rental prices. The higher the demand for an area, the higher the landlord can charge in rent.

“Larger homes that have more amenities generally warrant higher rental prices. Keeping an eye on what other rental homes in your area offer should also inform your pricing strategy.”

 

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