How to compete with sparkling new rentals?
So you’re an investor (aka landlord) and you’ve been renting your apartment out for some time now. In the meantime, you’re seeing a plethora of new, sparkly and shiny rental apartments popping up all over the city. You may be wondering: how can you compete? Should you still be charging the same rent or more rent? What can you do to maintain your competitiveness?
Here’s a few things to keep in mind as you determine your strategy:
- Location: are you in a prime location? Are you in the neighborhood for your target renter or are you off the beaten path? This is key to determining just how your property will be sized up by others.
- Services: most new rental buildings have impressive amenities, but not all. If you happen to be in a building that has a doorman, offers a gym, and perhaps a kids’ play room, you should be able to hold your ground. Plenty of new offerings, especially in less prominent locations, have only virtual doormen or none at all, and may be lacking in other services. Should your building also be missing the bling, you may wish to price your apartment according to similarly endowed buildings to reduce vacancy time.
- Size: this is a big factor. How large is your apartment relative to the number of bedrooms? If your apartment was built more than 10 years ago, chances are you’re sitting pretty. Why? Because of the last decade, developers have slowly but surely been shrinking the footprints of new apartments. This has been happening for two reasons: 1) because land values have risen so much that the only way for developers to make their desired profit is to build tighter apartments, and 2) because the amenities provided have gone through the roof, and are not cheap to offer and maintain. Therefore you can spread the cost across more units if they’re smaller.
- Unique features: most new rental properties are rather cookie cutter and very efficient. In other words, they don’t have interesting nooks and crannies, charming windows, exposed brick walls or small gardens. Should your apartment boast any unique or unusual features, play them up. Many renters would rather forego sparkle for charm and character.
- Quality: the quality and state of your apartment matters, from floors to appliances. If your kitchen is 15 years old but you’re expecting to charge similar rent to that apartment across the street with new Viking appliances, you may wish to either reconsider or upgrade your kitchen or bathroom.
So before you go to market again with the same pricing strategy from previous years, it may be worth going through the above factors to determine how you can best compete with all the sparkling new rentals hitting the market.