How Much Should I Charge for Rent in North Texas?

When it comes to managing rental properties here in North Texas, there’s not many things as important as nailing the pricing. If you price your property too high, it attracts the wrong kind of attention. Chances are, you’ll attract people who are willing to pay a higher price — but only because they have another point they need to negotiate on, like bad credit or a spotty work history. On the flip side, if you price it too low, you’ll have less cash flow — and a poor ROI for your property.

When it comes to how to price rental property, think of it like Goldilocks and the Three Bears — not too high, not too low, but just right.

But how, exactly, do you find that “just right” amount? How do you answer the question “how much should I charge for rent?” And how do you price your North Texas rental property so you get both the quality tenants and the ROI you’re looking for?

The LEAP Process for Pricing Rental Properties

At LEAP, we have decades of experience in pricing rental properties in the Dallas-Fort Worth area, and today, we’re pulling back the curtain and sharing our exact process for pricing rental properties that not only get great tenants into our properties — but also generate serious cash for our clients in the process.

How we do that? By pulling comps.

But the exact way we do it is a little different (and a lot more involved). In our experience, if you really want to price your rental property competitively, it’s about more than just pulling the pricing for other homes or rental units in the area — you’ve got to get really specific.

We start by searching subdivision in the past year, and then we start punching in details that will narrow down the results. What’s the square footage of the property? What year was it built? Was the kitchen recently redone? Are there granite countertops or newly refinished floors? Does the property have any other amenities that help it stand out?

Once we plug in all the details of our property, we see what else in the neighborhood is comparable and review that pricing. If there aren’t any properties in the immediate vicinity that compare to our property, we’ll start to widen our search area (being careful not to widen it too far, which can affect pricing due to neighborhood changes).

Once we’ve reviewed how much comparable properties are renting for in the area, we also look for any additional factors that might impact the pricing of our property. Is our property closer to a major road or next to a house that’s in serious need of updating (which could lower the price)? Or is it nestled in a quiet corner, surrounded by all newly renovated homes (which could bump up the price)?

The point is, the key to finding that “just right” price to a property is doing a deep dive of the area and understanding how and why other properties are priced the way they are — and then pricing your property accordingly.

Rental Pricing Mistakes to Avoid

So we just talked about exactly what you want to do when figuring out how to price your rental property. Now, let’s talk about the flip side of the coin — exactly what you don’t want to do.

The first mistake you want to avoid when pricing your rental property is also the mistake the vast majority of property owners make — and that’s pricing based on expenses. You think, “My expenses are X each month, so I should charge Y in rent in order to cover those expenses.”

We understand that line of thinking. But the truth is, you have to price in line with the market — regardless of your expenses. Because if you price your property too high, you won't be able to find a quality tenant — and you won't be able to cover even a portion of your expenses.

The other mistake you want to avoid is pricing based on what you “hear through the grapevine.” It doesn’t matter if your friend or neighbor or great aunt Sally owns a rental property and claims they’ve been able to charge high rents. Because chances are a) they’re exaggerating the price, or b) there are other factors that affect the rental price that they’re choosing not to share with you (like the quality of their tenant-screening process or the upfront amount they invested in repairs and renovations).

Not Sure How to Price Your Rental Property? LEAP Can Help

Pricing rental properties can be tricky — but it is, hands down, the most important part of the property management process. With LEAP’s pricing process, we don’t leave pricing to chance — we rely on the data and numbers to price our client’s properties effectively.

Not sure how to effectively price or manage your property? Get in touch today to find out how LEAP can help.