Despite the staggering heat during the summer, people continue to move to the Phoenix area. The city's population has increased by around 12% in the past 10 years. Many people assume rental prices in Phoenix are high due to strong demand.
It can be challenging to figure out how to price your rental unit. There are many myths about rental valuation and property pricing in Phoenix. This blog will go over these common misconceptions and how to get a good idea of what you should charge for your property.
Myth: I Don't Need to Get a Rental Valuation
Many property owners don't believe they need to have a rental analysis performed. You can save time finding potential tenants by knowing how much rent you need to charge. Having a rental valuation done is important since it looks at multiple factors to determine rental prices, such as:
- Down payment
- Purchase price
- Interest rate and loan terms
- Closing costs
- Capital expenditure
You'll also need to use various property valuation methods to ensure your rental price stays competitive. These strategies are intended to help you get the best return on investment (ROI) possible.
Myth: I Can Raise My Rent Prices Whenever
Many landlords think they can raise their rent however and whenever they want. While there are no rent control laws in Arizona, the lease between you and your tenant may specify certain parameters on how often you can raise their rent.
Landlords in Arizona don't need a reason to raise rent. They also can give 7 to 30 days' notice regarding the rent increase. This depends on the terms of your lease.
Keep in mind that while there aren't strict laws restricting rent increases, it may not create good feelings between you and your tenants. You may lose high-quality tenants if you keep increasing how much they pay.
Myth: Adjusting Rent Based on Applicant's Income
The monthly income of potential tenants is insufficient justification to charge higher rent. Altering your monthly rental amount violates various housing laws.
While some renters might accept the higher rate, others may be deterred. They may be unwilling to pay the higher amount just because their income is higher.
Myth: Rent Should Reflect Expected Inflation
Some landlords may think that they can use inflation to establish their rental valuation. There are other factors to keep in mind when looking at rental amounts, such as:
- Property condition and size
- Economic conditions
- Government regulations
- Location
- Desired features
- Market conditions
Rental amounts based on inflation can end up with the unit being under or over-priced.
Get Help With Rental Valuation From a Phoenix Property Management Company
It can be challenging to figure out the best property valuation in Phoenix. We recommend working with a company to get an accurate property appraisal to ensure you get the highest amount of rent possible.
The experts at Real Property Management Phoenix Valley are here to help you perform a rental market analysis. Our team has conducted many rental income assessments in the Phoenix area. Reach out to our office to learn more.
