What Should My Property Rent For?
What should your property rent for and how to determine the rent to charge.
Many landlords and owners base what they want to charge on two things.
- What others are charging for rent in the area (we call these comps!)
- The basic cost/expectations for the property
Owners need to keep in mind when selling or renting the target amount needed the sell the property or the rental amounted needed to have positive cash flow is not based on the amount that they need to accomplish, but what a willing able well qualified tenant will pay you.
Sometimes when a tenant will pay you over the market rental price they are not doing this because they want to help you out, but because they are desperate and no one else will rent to them or if they are just moving to the area and are in a bind, once they get settled in they will be looking for another rental that is priced properly.
Many owners and property managers look at web sites like Craigslist, Trulia, hot pads and many others for comps. These sites only show what folks are asking not the rent that was actually received. Also, you have no idea how much down time the property was vacant. Tenant turnovers are very costly you will have to have the utilities put in your name, the extra cost to re-rent the house, and the possibility of vandalism to your property.
We feel the best course to take, is to price the rental fairly in comparison to the competition and quickly respond to your tenant concerns and needs.