Dream Lands Design
  • Home Improvement
    • DIY
    • Remodeling
    • Woodworking
    • Accessories
    • Home Design
      • Furniture
      • Organize
      • Tips
      • Decor
        • Interior
        • Exterior
  • Design Ideas
    • Bathroom
    • Bedroom
    • Dining Room
    • Living Room
    • Kitchen
  • Gardening
    • Backyard
    • Front Yard
    • Landscaping
  • Home Improvement
    • DIY
    • Remodeling
    • Woodworking
    • Accessories
    • Home Design
      • Furniture
      • Organize
      • Tips
      • Decor
        • Interior
        • Exterior
  • Design Ideas
    • Bathroom
    • Bedroom
    • Dining Room
    • Living Room
    • Kitchen
  • Gardening
    • Backyard
    • Front Yard
    • Landscaping

Categories

  • Accessories
  • Backyard
  • Bathroom
  • Beauty
  • Bedroom
  • Cars
  • Decor
  • Design Ideas
  • Dining Room
  • DIY
  • Entertaining
  • Exterior
  • Finance
  • Front Yard
  • Furniture
  • Gardening
  • Green Living
  • Home Design
  • Home Improvement
  • Interior
  • Kitchen
  • Landscaping
  • Lifestyle
  • Living
  • Living Room
  • Organize
  • Photography
  • Real Estate
  • Remodeling
  • Tips
  • Uncategorized
  • Wall Improvement
  • Woodworking

Archives

  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • Privacy Policy
  • Terms of Use
  • Disclosure
  • Sitemap
  • Contact Us
29K
98K
0
Dream Lands Design
  • Home Improvement
    • DIY
    • Remodeling
    • Woodworking
    • Accessories
    • Home Design
      • Furniture
      • Organize
      • Tips
      • Decor
        • Interior
        • Exterior
  • Design Ideas
    • Bathroom
    • Bedroom
    • Dining Room
    • Living Room
    • Kitchen
  • Gardening
    • Backyard
    • Front Yard
    • Landscaping
featured image - How to Determine How Much You Should Charge for Rent
You're here: Home Home Improvement How to Determine How Much You Should Charge for Rent

How to Determine How Much You Should Charge for Rent

  • Perla Irish
  • May 28, 2021
Total
2
Shares
0
0
2
0
0
Table of Contents Hide
  1. 1. Read Up on Your Area’s Rental Laws
  2. 2. Be Aware of Your Competition
  3. 3. Use the One Percent Rule
  4. 4. Rental Rates Change with Seasons
  5. 5. Look Out for Changes in the Local Market
  6. 6. Set Budget for Maintenance and Repairs
  7. 7. Add Rent-Enhancing Features
  8. 8. Use More Than One Way to Collect Rent

Setting a rental price for a property is pretty tough, but its importance can’t be stressed enough.

It’s natural that as a landlord, you’d want to set a price that earns you revenue and profits and is reasonably priced for your tenant.

image - How to Determine How Much You Should Charge for Rent
How to Determine How Much You Should Charge for Rent

Charging too high or too low a rent will harm your rental income, not to mention leave your rental vacant for extended periods.

So, it’s essential to find a balance between the two to find the ideal tenant for your property.

To make things a little less overwhelming for you, we’ve put together a list of eight things you should do to figure out the perfect rent amount for your rental.

1. Read Up on Your Area’s Rental Laws

Some states have rent-control laws to restrict landlords from charging high rents or increasing it beyond a specific amount annually, which works well for tenants. These laws are local and vary city-wise.

Hire a lawyer to find out whether the city where you have your property even has rent control.

If so, they need to let you know what rules and regulations you must follow before you can determine what rent to charge.

2. Be Aware of Your Competition

Your decision on what to charge as rent can be made easier if you look around and check out what other landlords in your neighborhood are charging for similar rentals.

While looking around, be sure to find out whether the rooms for rent nearby are worth comparing with yours in terms of size, bedrooms and bathrooms, amenities, and property condition. After all, it doesn’t make sense to compare a studio apartment with a single-family house!

If your property’s superior to the others in all aspects, you know you can charge a higher rent than other landlords.

Rentometer is a tool that can help you compare the rental rates of properties in your area to make an informed decision about what you intend to charge for your property.

Finally, cities with more robust economies and better job opportunities like San Francisco will charge higher rents and lure more potential tenants.

At the same time, those that haven’t made much progress in any of these areas will hardly draw any tenants.


Read Also:

  • Why Rental Agreements Are More Important for Landlords Than Tenants
  • 5 Ways to Finance Your Vacation Rental Property the Right Way
  • Tips That Can Help You Find a New Place to Rent

3. Use the One Percent Rule

The one percent rule states that the rent you charge for your property should be between 0.8 % and 1.1 % of its value.

So, if your property’s value is $350,000, the rent you get to charge is in the range of $2400 to $3300 per month.

Let’s take another example. If your property’s value is lower than $100,000, then the ideal market-based rent to charge would be 1 % of the property value or $1000.

But if the property price is equal to or higher than $375,000, it’s advisable to use the lower end of the scale to fix a rent amount, if you wish to attract only the prospective tenants.

4. Rental Rates Change with Seasons

Rental rates vary seasonally because people aren’t comfortable or willing to move during the winter months due to the extreme cold.

On the other hand, rental rates are the highest during the spring and summer months because people consider these times ideal for moving.

Schools are closed, and students move to other states and cities for college, creating a demand for new rental rooms.

If, for whatever reason, you’re in a situation where your old tenant had to leave the rental during winter, brace yourself for the possibility that you may not find a new tenant anytime soon, leading to a longer vacancy period.

If vacancy’s not an option, you need to be flexible enough to charge a much lower rent to draw a potential tenant.

5. Look Out for Changes in the Local Market

Changes in local market conditions play a significant role in determining what you’ll end up charging as rent for your property, whether higher or lower.

So does the competition, which includes landlords with properties similar to yours.

As a landlord, the decision to set the rental price you wish to and increase it when it’s time for lease renewal is yours. So, be on the lookout for such changes.

6. Set Budget for Maintenance and Repairs

It’s a given that a rental property needs to be maintained well to keep attracting prospective tenants.

So, set aside how much money you need towards the maintenance and upkeep of your property by using an excel worksheet or easy-to-use accounting software, if you can find it.

The maintenance cost of your property is likely to cost 1 percent of your property value, so it makes sense to keep half of your income from rent for repairs and maintenance.

If you plan on providing utilities, such as electricity, gas, water, and so on, find out how much these would cost on average when you have a tenant living on your property.

7. Add Rent-Enhancing Features

Adding extra amenities in and around your property is also a great way to attract potential tenants.

Think about appliances or items that are likely to be irresistible to your tenants. They will, without a doubt, involve spending a good deal of money because they’re not things you can purchase monthly.

If you provide amenities such as a washer and dryer, a dishwasher, or even a pool, you may be able to charge a higher rent between 3 to 15 percent more of what was charged earlier.

You should also consider the maintenance problems that may crop up once you buy or install these items.

Many landlords decide against adding certain appliances because of the additional issues they may cause when in use.

In a word, you should remember that if other properties don’t offer many of the amenities you do, it automatically gives you an edge and the freedom to charge a higher rent. When you advertise your room for rent on a rental listing portal, add details of all these amenities to your ad, to make it stand out to your would-be tenant(s).

8. Use More Than One Way to Collect Rent

According to data from a survey conducted by Zillow, 58 percent of tenants wish to pay rent online, but only 36 percent get to do so.

While paying rent online is the norm these days, you may want to give tenants the flexibility of paying rent by more than one method.

You can hire a property manager only for rent-collection purposes if feasible. Or they can mail you a cashier’s check, personal check, or money order, although security may be an issue here.

A drop box is another secure way of collecting rent where you don’t have to meet the tenant personally.

Rent collection apps have also come up in a big way, so your tenants can use Paypal or Venmo from their smartphones and transfer you the monthly rent.

Finally, you could meet the tenant to collect rent but refrain from taking cash because there’s no way to record the transaction unless you share a payment receipt with your tenant.

Should there ever be a dispute whereby the tenant claims to have paid the rent, and you don’t recall receiving it, you’ll have no way of proving you’re right without any evidence.

So, do you feel more confident about setting rent for your property? Be sure to consider some of the most crucial factors contributing to rental rates, such as rents of similar properties in the area, the market demand, the overall property value, the added amenities, and maintenance costs.

That way, no one can stop you from setting a rent that will surpass all other rents in your area and bring you only the best of tenants!

Total
2
Shares
Share 0
Tweet 0
Pin it 2
Share 0
Share 0
Related Topics
  • find
  • landlord
  • maintenance
  • market
  • property
  • rental
  • repairs
  • season
  • value

Subscribe

Subscribe now to our newsletter

You May Also Like
featured image - How to Choose the Perfect Flooring for Your Business Tips from Our Company
View Post

How to Choose the Perfect Flooring for Your Business: Tips from Our Company

  • March 18, 2023
featured image - What Should You Know About Silicone Rubber Compounds?
View Post

What Should You Know About Silicone Rubber Compounds?

  • March 18, 2023
featured image - Storage Units Sizes, Uses & Pricing
View Post

Storage Units: Sizes, Uses & Pricing

  • March 18, 2023
featured image - Common Sofa Fabrics
View Post

Common Sofa Fabrics

  • March 16, 2023
featured image - A Comprehensive Guide on Insurance for Consultants
View Post

A Comprehensive Guide on Insurance for Consultants

  • March 15, 2023
Featured image - Flat Roof Repair: All You Need to Know
View Post

Flat Roof Repair: All You Need to Know

  • March 14, 2023
Featured image - Maximize Your Comfort with Big Pillows for Every Sleeping Position
View Post

Maximize Your Comfort with Big Pillows for Every Sleeping Position

  • March 14, 2023
featured image - Understanding Your Lease Agreement 5 Key Responsibilities as a Renter
View Post

Understanding Your Lease Agreement: 5 Key Responsibilities as a Renter

  • March 14, 2023
Dream Lands Design
  • Privacy Policy
  • Terms of Use
  • Disclosure
  • Sitemap
  • Contact Us

Input your search keywords and press Enter.

Add Dream Lands Design to your Homescreen!

Add