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Vince Arcuri - Realtor Tampa

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Rental Pricing Strategies As landlords we only make money when our units are filled. In fact, eliminating your vacancy factor, the percentage of time that you property remains unrented, may be the only opportunity for you to see a profit. That is why it is so unfortunate when I see landlords make a mistake in their pricing. There are two ways to price your rental: the expense method and the at-market method. Expense Method Some landlords price their rentals based on what they owe. They add up their mortgage, taxes, insurance, upkeep, management fees, add in some profit, and, bingo, they have their price. This is the expense method of arriving at a price; you add up all your expenses and you have your price. That is certainly one pricing strategy and, depending on your expenses, it may be a valid one. But could that method cause you to leave money on the table? Or could it price you out of the market? Let’s say you have a rental that you have on the market for $1,000 per month. And conveniently your expenses total $1,000 per month. Using the expense method would work fine for that property. However, what if the true market rate rent was only $750 per month? Using the expense method would cause you to be $250 over market price. Just as painful, what if the true market rate rent was $1,400 per month? Using the expense method you are cheating yourself out of $400 per month of rental income. That is $4,800 per year of lost rent. Learn more about landlord strategies with a complimentary resource pack.