Did you know that chewing gum sits inside your digestive system for five to ten years -- you did? Sorry, we have to inform you that you've been misinformed.
Unsure what this has to do with rental valuation and other market aspects? Like medical myths, misinformation about rental property pricing is pervasive.
This creates issues, including increased difficulty searching for true information and landlord complications. Abiding by rental pricing myths can harm your investment.
If you'd like to know how to avoid investor mistakes, then keep reading. Below is our rental price guide for investment properties in Chevy Chase, MD.
Myth: Rental Valuation Is a Suggestion
Some real estate investors think their rental properties will always make money once they pay them off. The logic is, "Rent prices are high, so I'll make money no matter what!" This is untrue.
You must understand and follow rental market insights to make your rental profitable. Landlords should know local prices, demand, and occupancy rates to earn a reasonable income.
You need to balance your return on investment (ROI) vs. attracting tenants. Always remember -- if people can find something better for cheaper, why should they choose you?
Myth: You Can Raise Rent as You Please
While we're debunking property myths, let's talk about increasing rent. There are many ways landlords can increase their ROI. They can improve their marketing and marketing or enhance curb appeal.
However, once you agree to a price in your rental agreement, you're stuck with it throughout the contract duration. Landlords in Maryland cannot legally change prices mid-lease unless the lease says so.
Maryland doesn't have rent control laws, but some cities, like Chevy Chase (and all of Montgomery County), do. This means there are limits to how much you can increase your rent.
Do not sneak a price bump on rent once your tenants have signed the contract and moved in. Attempting this may result in fines and legal action from the tenant.
Myth: Rental Properties Are All Passive Income
The appeal of buying investment properties is that they're easy money -- passive income. All you have to do is post your ad, sit back, and make instant money! Owning rental properties is more complicated than that.
This is one of those pricing property facts that has less to do with how much the property costs, but the associated fees. Landlords pay for upkeep, insurance, property taxes, and HOA memberships.
You'll also (or at least should) pay for tenant screening and marketing. If all this is too much for you to handle, you'll pay a property manager to do it for you.
Have You Misunderstood Rental Valuation?
If you've misunderstood rental valuation, we hope we've cleared some misconceptions. We wanted to dispel some rental property myths to help maximize your income.
PMI Chevy Chase is a full-service real estate management company that helps clients with property management and real estate brokerage. We've aided investors for over 20 years.
Our team handles marketing, tenant screening, rental collection, maintenance, and more. Contact us if you need a property manager to help navigate the rental market.
