It's easy to see why renting has become one of the most popular side hustles in recent years. Rent is at an all-time high with a median cost of $2,000.
As everyone scrambles to rent out their properties for passive income in Boise, they fall prey to misconceptions about the "job." People falsely believe that being a landlord is an easy gig where they can do things however they want. What are some common myths perpetuated by friends and social media influencers?
Today, let's take a look at just a few of the rental valuation misconceptions people get about rental pricing in the Boise area.
Rental Valuation Is Only a Suggestion
Many people get the idea that having a rental property is, once you pay it off, a moneymaking machine. They believe that with rent prices being so high, they can charge however much they want since someone will pay it. This simply isn't true.
To make your rental profitable and competitive, you will need to adhere to a rental analysis. This involves comparing local prices, demand, and occupancy rates—among other things—to arrive at estimated rental earnings. This makes your rental better able to make a good ROI without scaring off potential renters.
It's All Passive Income
Many people get into buying a rental property because they believe it is free passive income. All they have to do is put it up for rent, and voila! Checks come in the mail with no strings attached.
There are a lot of costs associated with being a landlord. You have to pay for maintenance, property taxes, and insurance. There will be background checks, HOA membership costs, and lots of other small money-guzzling fees.
Granted, some of these costs are worth their weight in gold. Paying for property management is sure to boost your ROI. But it's not the free money hack some pretend that it is.
You Can Always Raise Rent
One of the great things about being a landlord is that there is almost always a guaranteed increase in ROI each year. While this is true, it's true with a catch.
First, once you agree to rental pricing in the contract, you have to stick with it for the duration of the contract. So don't think you'll get away with it by suddenly bumping rent up once your tenants are moved and locked in.
Finally, local laws and rent boards restrict how much rental prices can increase year-over-year. Inflation certainly does affect things, but it's not like you will see a 50% increase from one year to the next.
Find Boise Property Management
Rental valuation is a science of sorts, one that lends itself to a lot of social media-fueled myths. Many people falsely believe they can choose rental pricing on a whim and then earn easy money. Just as you can't suddenly raise rent to any price you like, keep the above myths in mind when becoming a landlord.
1st Rate Property Management is Boise's leader in responsible, customer-friendly, skilled rental management. Our First-Rate Service is so good that we encourage you to contact our president directly for any doubts. Get started with our free rental analysis.