How Much Should I Charge for Rent? November 24, 2021
One of your main priorities as a landlord is to keep the occupancy rate of your property high. You can do so by screening your potential tenants to help decide who’s likely to stay the longest. The goal would be to retain your tenants as much as possible. Note that the rent amount you charge plays a major role in what type of tenants you’ll attract. It also impacts how much profit you’ll earn each month.
Whether you rent one unit or multiple, it’s essential to determine the appropriate rent amount given your location, current market demands, and amenities.
Not sure how to do that? We have you covered. Consider the following factors to determine how much rent you should charge your tenants.
How Much Rent Should You Charge?
Check Rent Control Laws in Your State
It’s important to know that not every state has rent control laws. Some have regulations to limit the amount landlords can charge and how much they can increase it each year.
Since rent control regulations are established at the local level, the average price may vary from city to city. The following are some of the states that don’t have rent-control laws in place:
- New Jersey
- Washington, D.C.
- New York
Make sure you check with a qualified attorney on whether your state has any rent control laws or restrictions in place. This step is important before you determine what to charge for rent.
Research the Rental Value of Properties in the Area
Did you know that approximately 77 percent of people prefer to live in a safe neighborhood?
You need to determine how your rental unit compares to others in the local market. Research other properties in the area that have similar amenities, appearance, and layout.
After considering the price of these competing properties, decide the amount you should charge from renters. If your property is in better condition or offers amenities that other properties lack, you can charge more.
Take into Account Additional Expenses
Never overlook aspects such as the additional expenses that come with owning a property. That means you need to track your overall expenses, evictions, and vacancies.
In addition to that, consider the maintenance costs that come along with living in certain climates.
You must take into account the cost of property damage and normal wear and tear that residents cause. Typically, the main expenses you’ll have are:
- Property maintenance
- Gardening and landscaping
- Unit-specific maintenance
- Maintenance of laundry room
- Vacancy cost
- Employee payroll
Rental charges may drastically vary from state to state. Discussing the current rent trends and rates with a professional property manager is crucial to deciding rental amounts.
Take into account market demands, seasonal trends, location, property condition, and amenities compared to neighboring properties to determine the rent you should charge.