March 23, 2023

The Role of Rent Appraisals in the Success of your Short-Term Rental Business

by Alices Home
Rent Appraisal - Alices Home

The Role of Rent Appraisals in the Success of your Short-Term Rental Business

Alices Home
March 23, 2023
Rent Appraisal - Alices Home

Table of Contents

What you charge for rent has an enormous impact on the performance of your short-term rental. In addition, this amount has an effect on how vacation-makers perceive your property before they know anything else about it.

If you charge too much, the property is exclusive and out of their reach.

In addition, your rental returns each week may be affected.

If you charge too little, you could be missing out greatly. 

This is the reason for working with professional rent appraisals for short-term rentals.

What is Rent Appraisal?

It is the process of evaluating the value of a rental property in the current market. It involves assessing the property’s location, size, condition, and amenities to determine the appropriate rental price. 

A rent appraisal can be performed by a real estate agent, property manager, or appraiser, and is important for landlords to ensure they are charging fair rent and maximizing their profits. 

Tenants can also benefit from rent appraisals as they provide transparency into the rental market and help them negotiate a fair rent. Rent appraisals are typically performed on an annual basis to keep up with changes in the rental market and ensure the rental price remains competitive.

Rent Appraisal - Man Checking the right price for STR property - Alices Home

Short-term property owners may determine the rent amount of their home in a few ways. By themselves, using online calculators, or by working with a professional appraiser, like Alice’s Home Service.

Important pointers for your rent appraisal

Rent appraisal professionals will take a number of points into consideration when deciding where to price your property.

1. The location and other short term (and long term) rentals in the area

It makes sense that your property is priced within the median price in your area. It will look odd and affect interest in your property if it is priced too far out of that bracket.

Having said that, it does matter how your property compares to what else is available. If it compares favourably, and has much more to offer, the rental price should reflect that.

2. The Market

Professional rent appraisal services will be able to determine whether the market is over or under supplied in short term rental properties similar to yours.

This will make a difference to what you charge.

3. Certain considerations that hosts aren’t necessarily aware of

Owners of short-term rental properties will be better off charging a lesser amount in a quieter market, than an amount more desirable and having the property sit empty.

These are the types of considerations professional rent appraisers will bring to hosts when calculating the rent fee.

4. Analytics

Once your short-term rental is on the market, the job isn’t done yet.

You need to take notice of various metrics like whether you receive between 2-5 applications a day, or whether your property stays empty for a long period of time.

If you don’t receive any interest, and your property stays empty, this is an indication your property is not priced correctly for the market.

Appraising your own home can be a difficult and emotionally charged job for owners. Everyone wants their rental property to perform well, and everyone believes they have invested well too.

After all, you know the features and benefits of your own property. This is why it’s a good idea to work with a professional rent appraisal service. Your emotions are left out of the picture and you can be assisted and advised appropriately.

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