Price is the most crucial aspect of any successful rental real estate. Too much, and you struggle to obtain tenants. Too little and you risk losing money on your investment. The struggle for every property owner is to ascertain the “sweet spot” price range for your unit. Unfortunately, how do you begin assessing the value of your real estate? How do you calculate the right price for a single-family home? What about a vacation rental? A full-service property management company could be the solution to your problem.
San Diego, due to its numerous neighborhoods with unique characteristics from Barrio Logan to University Heights, from Kearny Mesa to San Ysidro, is a challenging real estate market to measure. To help you understand the leasing prices of certain properties, here are a few things you should consider as a property owner:
Location, location, location
The location is the single biggest factor that determines the rental price. Your first step should be to scope out the competition. Check out the other condos or other buildings in your immediate area, how are they priced? For instance, if you own a condo unit near Seaport Village or on the Harbor, then you should scope out other condominium towers. What amenities do they offer? What are their price ranges?
Conversely, if you own a home in National City, you should check out your neighbors. How much are they leasing their residential property for? Your immediate neighbors can tell you a lot about where you start in setting your prices. However, don’t rely too much on your neighbors because unit pricing can swing several hundred dollars, within the same street or even the same building depending on maintenance and amenities. Once you have an idea of your price points, it is time to drill into the details.
Economic Vibrancy, Commute, Community: Easy Living
Next, consider the economic viability in your area. Is your real estate in a prosperous community? Are you located near a freeway? What type of commute can your tenant expect? Are your tenants able to walk or bike to work? The closer you are located to major freeways and streets, the more you may be able to charge tenants because of the convenience. Where your tenant works does not affect leasing price, however, the ability of your tenant to work in close proximity is a value-adding factor.
What is the parking availability like? Is your unit in Little Italy where every night it’s a battle with tourists and “foodies?” Alternatively, is your property in La Jolla, a vibrant community with constant security and easily accessible amenities.
Finally, consider the community assets nearby. Your residents will pay more if there is easy access to recreational, educational, and community environments. Balboa Park, museums, community centers, proximity to Pacific Beach, Ocean Beach, Del Mar, or Imperial Beach all increase value.
Essentially, how “easy” is it for someone to live on your property? The easier it is for them to get to work, find parking, and go for a run on the beach, take a date out to a nice dinner, or visit a museum, the more you can charge.
Public Transportation: Under-appreciated by Owners
Many San Diegan property owners (and Californians in general) do not appreciate the immense value that a nearby reliable transit station provides to rental units. San Diego county is populated by numerous transplants, many from the East Coast and abroad. These transplants, unlike native San Diegan property owners, understand the value of public transportation and embrace it.
San Diego county operates the Metropolitan Transit System (MTS) which offers bus and trolley lines. Popular stops on Green Line trolley include Old Town, the Fashion and Mission Valley shopping centers, San Diego State University, Seaport Village, the Gaslamp Quarter, and Petco Park. If you offer a unit with easy access to the Green Line, you are sitting on a veritable gold mine.
Finally, who is your target market? If you are open to leasing your residential property to families or couples looking to build a family, then consider the value of nearby schools. Can their kids walk to school? Is it a short drive? Parents are already overburdened working and caring for their children, if a school is nearby, that is one less thing for them to worry about. Never overlook the value of living in a good school district.
Property Advantage is a San Diego-based rental management company that specializes in the Southern California market. Whereas you would need to spend hours (or more likely days) conducting market research, Property Advantage has all of that information at the touch of a button. Their property managers know how to assess a property and ascertain its rental value.
If you're considering full-service property management, Property Advantage enables you to leverage the best assets of your property for the least investment of time. You are better off focusing your mind on securing your next property, rather than conducting research. Property Advantage can ensure that they set the best price available for your property to keep it occupied and generating revenue. Whether you own a single-family home or a multi-family property, Property Advantage can help you with residential property management.