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Pricing Your Philadelphia Home to Rent

Investing in the Philadelphia real estate market can be a great financial decision. Purchasing a rental property can help you earn a stable cash flow while also growing your long-term wealth.

In addition to rental property marketing, setting the right price for your Philadelphia rental is a crucial step in the leasing process. Having a competitive price can make a significant difference in attracting tenants, maximizing the return on your investment, and ensuring long-term success.

In this article, the experts at TrustArt Realty will delve into everything you should know for pricing your Philadelphia home for rent. Keep reading for our best tips to get a good return on your investment!

The Importance of Pricing Your Philadelphia Rental Home Correctly

The price you set for your Philadelphia rental property plays a pivotal role in its long-term success. Pricing it too high can lead to prolonged vacancies, resulting in lost rental income and increased maintenance costs.

On the other hand, pricing it too low may attract unsuitable or unreliable tenants, which will only impact your profitability in the long run.

Setting an appropriate rental price will help you stand out in a competitive rental market, such as the market in Philadelphia. With hundreds of homes listed for rent every day, a competitive rental price can help you attract more renters.

A red “house for rent” sign on a lawn.

Factors That Affect the Price of Rental Homes in Philadelphia

There are many factors that influence the price of rental properties. Understanding these variables is essential for setting a competitive price for your Philadelphia rental. To help you, we’ve listed the primary factors to consider when pricing a rental property:

  • Market conditions. Rental prices are also highly influenced by market conditions, including supply and demand dynamics, the current economic climate, and fluctuations. Conducting market research and staying informed about local rental trends can help you set the right price for your Philadelphia rental.
  • Property type and size. The type, size, and layout of the property also influence its rental price. Single-family homes with several bedrooms, bathrooms, and amenities will typically command higher rents than smaller units, such as apartments and condos. Additionally, features such as updated appliances, modern finishes, and outdoor spaces can increase the value and rental potential of a property.
  • Location. The location of a property is one of the biggest determinant factors that affect its price. While there are many great areas to invest in in Philadelphia, neighborhoods with amenities such as parks, public transportation, and proximity to schools, tend to have a higher demand for renters.
  • Amenities. If your property has amenities or recent renovations that tenants want, you might be able to charge a higher rent than what other similar nearby properties are asking for. Things such as pools, dryer/washer combos, and even pet-friendly accommodations can give your property a competitive edge.
  • Operating expenses. After collecting rent, you’ll have to use that money to pay expenses such as property taxes, insurance, maintenance costs, and even utilities. To avoid ending with a negative cash flow at the end of the month, you must ensure that your rental income covers these essential operating expenses.

Some money resting on top of a clipboard.

Tips for Pricing Your Philadelphia Home for Rent

We’ve delved into the most important factors you should consider when pricing your Philadelphia home for rent. Now, it’s time to go over some actionable tips that will help you set a competitive price for your rental property.

Conduct Thorough Market Research

Browse rental listings for comparable rental properties in your area. Keep a close eye on properties with similar features, amenities, and sizes. This will help you identify current market trends and set competitive rental rates.

Calculate the Rental Yield

Investments don’t always pay off. While the real estate market is far less volatile and more secure than the stock market, you need to ensure that you’ll get a good return on your investment.

Before you list your Philadelphia home for rent, calculate the potential rental yield. This is done by dividing the potential annual rental income by the property’s purchase price or current market value.

If the rental yield is too low, you might have to adjust your rental price to avoid ending with a negative cash flow.

Assess Tenant Demand

Paying attention to the tenant demand in your area is crucial when pricing your home for rent. For instance, if there's high demand for rental properties but limited supply, you may be able to charge a higher rent.

On the other hand, if the market has an oversupply of rental units, you may need to price competitively to increase your chances of attracting tenants.

The exterior of an apartment building

Be Flexible

Being open to negotiating the price of your Philadelphia rental can go a long way. Being flexible with your strategy can give you a competitive advantage.

This can also help you foster a better relationship with your tenants, which can translate into longer, stress-free tenancies.

Review and Adjust Pricing

The Philadelphia rental market is constantly fluctuating. Because of this, the prices of homes tend to change over time.

To ensure you get a good return on your investment, regularly review the current market trends and adjust the price of your rental accordingly. This will translate into adjusting the price of rent once a year for your current renters or listing your property at a more competitive rental rate to attract new ones.

Seek Professional Advice

Navigating the Philadelphia rental market can be overwhelming at times. If you're unsure whether you’ve set the right price for your rental property, consider seeking advice from a seasoned property management company.

These experts can provide you with valuable insights into the local market and help you develop a pricing strategy that maximizes your rental income.

Bottom Line

Setting the right price for your Philadelphia rental property is crucial for getting a good return on your investment. That’s why you must conduct market research, calculate the potential rental yield, and assess tenant demand in your area to price your home at a competitive rate.

Need help pricing your Philadelphia home for rent? Contact TrustArt Realty! Our team will not only help you set a competitive price for your home but also market and maintain your property.

five-star

I am a real estate investor in Philadelphia and could not be more happy with Yuriy and the rest of the team. Yuriy himself has over 10 years experience as an investor himself and his knowledge of the geographic region has been critical to our decision making. We are currently using Yuriy as our realtor and as our property manager. He is responsive, knowledgeable, and easy to work with. He has saved us from multiple potential bad situations in looking for investments. Because of his attention to detail, our closings have been very smooth. We also have to do most of our investing out of state and the Trustart team makes it easy. I would highly recommend Yuriy and the Trustart team as a realtor or property manager for anyone in Philadelphia - we are lucky we found them when we did!

Kealan Hobelmann Rental Property Owner