Across the country, prices for rental properties are at a six-year high.  Demand for rentals is still high from the housing crisis, and property owners are able to leverage that demand into higher prices for their rental units.  But the increased demand and the opportunity to charge higher rents aren’t all good news: while there are some very definite benefits for property managers, there are also some pitfalls that it is smart to consider before renting out a property in the rising market.

You can charge more for your property

The biggest benefit to the rising rental market is, of course, the ability to charge a higher rent for your property.  Especially in major metropolitan areas, demand for rental properties is high enough that rising prices aren’t a major deterrent to potential renters.  While it isn’t advisable to raise your prices too dramatically, keeping up with market rent for your area – even as it goes up – is a good move for any property manager.

Potential tenants may be less financially stable

Unfortunately, average income is not rising as fast as average rent; in fact, it’s falling in many areas.  What this leads to is a larger gap between available income and the price of rent for many people, and the result is that even reliable, hardworking tenants can find themselves falling behind.  It’s a good idea to be very rigorous when you pre-screen your tenants: the higher the rental price of your property, the more important it is to choose tenants with good credit and stable employment histories to avoid unpleasant evictions.  It’s also a good idea to have strategies in place in case tenants run into financial difficulty: being prepared to take a month’s rent in installments, for example, can save a relationship with a reliable tenant who has a difficult few weeks. 

Be attentive to your property’s details

With rents rising everywhere, potential tenants are looking for something special in a property to justify the high price.  Even if your property does not have particularly unique or unusual amenities, you can make a good impression on potential tenants by making sure that you pay attention to the details.  Clean corners, fresh paint and polished fixtures go a long way to making a property look well-maintained: to a tenant’s mind, this demonstrates that part of the higher price is justified by regular maintenance and a well cared-for building.

Small problems can be big deterrents

A tenant who might deal with a drafty window or creaky stairs in a lower-priced unit is likely to be discouraged from renting a high-priced unit with the same problems.  As rental prices rise, it becomes less and less acceptable for rental properties to have small flaws.  It’s a good idea to ask a professional property inspector have a look at your unit before renting it out: a thorough report can reveal the kinds of problems a tenant might not notice on move-in, but would definitely notice after months of living or working in the unit.  Fixing these problems before a tenant moves in can prevent them from feeling they’ve made a poor choice and moving out early.