The average residential rent in Boulder is about $2,500. However, Boulder property pricing goes far beyond averages and medians - it requires a comprehensive of the market and well-contemplated rental pricing strategies.
To gain this understanding, dispelling common rental valuation myths is a critical first step. Read on to learn some myths you have likely heard before and the reality behind them.
There Are No Standard Rental Rates
Some landlords think that setting monthly rent is an art rather than a science. However, charging between 0.08% and 1.1% of the property's cost is a well-oiled machine.
1% is an easy-to-calculate rule of thumb. It's aptly called the 1% Rule.
So, if your property is worth $350,000, you can charge a monthly rent of about $3,500. This keeps your property competitive in a large rental market while still making its management worth your while.
Inflation Dictates Rental Rates
Inflation does play a role in coming up with rental pricing strategies. However, other factors also contribute to Boulder rental trends, including:
- Nearby attractions
- Unit features and amenities
- Furnishings
- The location of the unit
- Local job markets
The bottom line is that there isn't a single factor that dictates how much landlords can charge. It's a combination of various things, and a property management professional can help you weigh and assess multiple factors.
High Rent Means Higher Profits
Some landlords want to charge more than 1% so they can maximize their property's value. Unfortunately, this frequently backfires since people don't want to pay a rent that's higher than is fair.
Setting rent too high might cause you to contend with unnecessary vacancies. You may lose several months' worth of profits in which you could otherwise be collecting fair money.
Low Prices Mean Bad Tenants
Other landlords worry about low prices because they think it will attract bad tenants. However, there's no correlation between the quality of your renters and the price you set.
Those who can afford a unit can live in the unit, and assuming that they have no past problems, you shouldn't expect any issues.
If you're worried about tenant quality, invest in professional tenant screening from property managers instead.
Raising Rent = High Tenant Turnover
Pricing low is a great strategy since you can increase rental rates over time. However, some newer landlords worry that raising the rent when leases renew will make their good tenants leave.
Renters will likely choose to stay to avoid:
- High moving costs
- Inconveniences regarding moving
- Competitive housing markets
- Difficult-to-navigate market shifts
- Building new landlord-tenant relationships
- Stability in their homes over time
Landlords shouldn't be scared to raise their rent when leases switch over. Even 14% rent increases are common, so you can make significantly more money this way.
Bust Rental Market Myths in Boulder, CO
Now that you know some rental valuation myths about Boulder properties, it's time to learn more about the rental market.
PMI Flatirons Group is committed to discovering and communicating property valuation insights to Colorado real estate investors.
We offer comprehensive reports about the condition and costs of properties, so get a free rental analysis to learn the actual rental value of your home today.
