In 2019, 36% of the households in the United States contained renters. People prefer to rent due to lower maintenance costs, no personal property fees, downsizing, more flexibility, and easier than buying.
If you're a property owner, renting it can be profitable, but you have to know how much to charge for rent. In this guide, we'll discuss the factors to consider when determining a price for your rental property.
Keep reading to learn more!
Know the Competition
When setting rent prices, it's a good idea to look at the national average cost. This is more of a general method to understand the rental market in the United States. For a better understanding, you need to look closer to home.
The cost of living varies depending on the state and city. For a good starting point, explore rental properties in your area by looking at what other landlords are charging. Look for properties with comparable features, recent rent changes, and locations.
Consider the Season
When you'll need to list your rental home will play a role in demand. Most people look to move around the spring and summer. During these in-demand seasons, landlords often get away with charging more as so many people are looking to move.
If you need to list your property in winter, you may need to list for lower because fewer people will be looking to move.
Location is Key
As you consider how to set rent for your property, its location is crucial in determining how much to charge. Nice neighborhoods in close walking distance to points of interest and good schools will be able to list at higher price points than others.
Account for Mortgage and Other Operating Expenses
After asking yourself, "what should I charge for rent?", the first thing you should factor into the price is your mortgage and operating fees. In addition to the mortgage, you might have personal property taxes to worry about each year, maintenance costs, repairs, and employee expenses while still turning a profit.
Try using a rent calculator to help you factor in these added expenses.
Available Amenities
The amenities your property offers are important to its value, especially if you offer things your competition may not have. The following amenities create an increase in home value:
- Parking
- Security
- Fitness Center
- Pool
- Recent remodels
- Laundry units
- Garden
- Patios/Outdoor spaces
- Utilities
These amenities draw in renters and might be the deciding factor between two properties. Don't be afraid to charge a higher rent if you have more to offer and include these as selling points in your marketing materials.
Learn How Much to Charge for Rent
There is much to consider when starting as a landlord. One of the biggest factors to think of is how much to charge for rent.
A lot goes into determining rental prices, so it's crucial to learn how to charge enough to turn a profit on your property. At Home River Group, we can help by providing a free rental analysis on your investment. Get started today.
