If you have a property that you would like to put up for rent, how much would you charge a prospective tenant? There is a good chance that you don’t know the answer to that question off the top of your head. What can you do to come up with a price that is fair to both yourself and your tenant?
Get An Appraisal Of Your Property
To begin the process of determining how much to charge for rent, you should ask a real estate agent to appraise your property. An expert in the real estate field will be able to determine how much you should charge based on the location of your property, the types of amenities it has and other factors.
Your real estate advisor will also research neighborhood properties in the area to get an idea for other properties in the area are renting for. This will help you charge a competitive rate to attract renters to your property.
Aim For One Percent Of The Home’s Value
If you are renting out a single family home, you should aim to charge roughly one percent of the home’s value. Therefore, you would want to charge roughly $1,000 a month if the home was worth $100,000.
However, you will want to take into account such variables as the location and quality of your property. For example, it would be difficult to charge $1,000 a month in a rural area where other properties are going for $500 a month.
What Are Your Renting?
Landlords who are renting out a luxury apartment in a large Edison, NJ will get to charge more than homeowners renting out their finished basement. You also have to adjust the price that you are charging your tenants if you are renting a professional suite as opposed to a pure living space.
In other words, if you are renting to someone who is going to run his or her business from your property, you can charge more because it is technically a commercial property.
Consider Your Costs
Your goal as a landlord is to make a profit. This means that you have to take your expenses and other costs into consideration when you decide on a price to charge each month for rent. If you have a mortgage on the property, you may need to charge slightly higher amounts each month as opposed to someone who doesn’t have a mortgage.
Make sure that you are not charging a lower rate based on the relationship you have with the tenant. You don’t want to break even or lose money on your rental just because you are renting to your brother or best friend.
It is tricky to decide how much rent to charge each month for your property. The answer to that question depends on the location of your property, the quality of your property and the needs of the tenant.
Ultimately, you need to look at the market value of the house as well as the rental values of surrounding properties to ensure that you are charging your tenants a fair amount for rent.