One of the most important aspects of being a landlord is determining the rent for your properties. You have to walk a careful balance of being able to make a profit and also having an property renters can afford. Here are some tips for setting rent as a landlord.
FIND OUT THE VALUE
One of the first steps you need to take is to find the value of your rental property. If you just purchased this property, you most likely will already have this information. If you are turning a property you already own into a rental property, you may not have as clear of an idea. Keep in mind that the current value may not be what you paid for the property. Reach out to an appraiser who will be able to give you an accurate assessment.
Once you figure out the value of the property, you can then come up with a monthly rent number. As a starting point, it’s recommended that you charge 1% of the property’s value for the monthly rent. So the landlord of a $300,000 home could potentially charge about $3,000 per month.
Before listing your property, take a look at comparable rentals. These units should have a similar square footage, number of bedrooms and bathrooms, and located in a similar area. If a similar property in the area has been on the market for a while, that may be a sign that it’s priced too high.
There are additional outside factors that may determine how much you are able to charge for rent. For example, when the economy and housing market are doing well, people are less likely to rent. This may mean that a rental point that worked a year ago may not be a desirable option anymore. Keep up on trends and be willing to make compromises where you can.
REACH OUT TO REALTOR
If you aren't sure where to start, a realtor may be able to assist you. They'll be able to give you a better idea of a price point and for what similar properties in the area are going. Reach out to friends and family to find a good recommendation.