How Much Should I Charge for Rent?

When you're new to being a landlord you probably have a lot of questions. At the top of the list is usually how much you should charge for rent. While you can pick an arbitrary number that's similar to other rentals in the area, there are actually ways to calculate what you should charge. The first thing you'll want to know when deciding what to charge is the law in your local area. Rent control laws vary from place to place, so it's important to look into the ones that affect you and your rental property.

Then, consider the 1% Rule. This states that the monthly rental amount should be approximately 1% of your home's market value. A $250,000 home should be rented for around $2,500 per month. Lower-priced homes, which are homes below $375,000 market value, are often priced around 0.8%, while homes above that market value may be at 1.1%. Staying in this range helps ensure that you're charging a fair rent amount.

Of course, market demand and competition can both affect the price you charge for rent, as well. It there's a big demand for rentals you may be able to charge a little more. That's especially true if your competition is doing the same. However, if you charge slightly less than your competitors you could also find that your property stays rented and you get good, long-term tenants.

So, how do you know what to do, and how can you bring everything together to get the best value from being a landlord? That's where getting the right guidance comes in. A property manager can help, because they have a lot of experience with different types of rentals and how much they cost.

They can also give you important tips about being a landlord, collecting rent, screening tenants, and handling maintenance requests. Many of them deal with evictions and other issues, too, so you won't have to do anything but cash your rent check. It's an easy and convenient way to price your rental properly and enjoy the benefits of being a landlord, without any hassle.

At Terra Equity Management we offer a professional tenant placement service. Our team uses proven methods to find you a qualified tenant saving you time, money, and frustration which will result in absolute satisfaction. There are no upfront fees and you only pay for results. Contact us today to learn more!