The question of how much should I charge for rent depends greatly on a variety of factors. From researching your location, to using rules of thumb and calculating costs, Landlord Station has all the advice you need in this article.
When asking the question of how much should I charge for rent, the community at LandLordStation.com is another great place to get information. We offer a free place for fellow landlords and property managers to ask questions, get advice as well as share ideas and experiences. You can log on to the LandLordStation.com website and ask that our members share their information and experience with the question of how much rent should I charge.
When finding the best rent price for your property, you must factor in the location and condition of the property as well as the local housing market. You can check the ads in your local newspaper to see the listing prices of comparable properties. A few weeks of perusing the local rental market may provide useful information. If a property rents quickly, it may have been priced too low. If a property stays on the market for a long period of time, it may be priced too high. As you can see, knowing the answer to how much rent should I charge can be a complicated matter. The more familiar you are with your local market and the comparable properties to that which you are listing, the more reasonable your rental price will be.
A general rule of thumb that is sometimes applied for answering the question of how much should I charge for rent is to charge no less than 1.0 to 1.1 percent of the property value with a max of 1.25 percent. Applying this formula for example on a home valued at $100,000, the rental at 1.1% would be $1100. per month. The lower the house appraisal value, the higher percentage of rent-to-value you can generally expect. Many landlords reduce that percentage amount slightly as the price of the property increases. In a tight rental market, it may be possible to get more per month rental.
A simple as that rule seems, there are a variety of other factors to consider when asking the question of how much rent should I charge. The location of the property is an important consideration. The identical property in a great area of town might rent for twice what that property would bring in a less desirable neighborhood. However, You have to be as dispassionate as possible when assessing the area. Looking for property values at your local appraisal district can also give you a good idea of how the area around your property has been appraised.
Another factor to consider when you need to decide how much should I charge for rent is the condition of the property. Cleaning the property, adding a fresh coat of paint, making sure the carpets are clean and the lawn is trimmed will make a big difference in the reaction of prospective tenants that you have found with the help of the multi-listing services at LandLordStation.com. The property must also be in good repair and safe for the tenant. Because of the maintenance required, many landlords factor in a maintenance and management allowance.
Considering all these factors is something necessary to calculate your return on investment. When you want to know how much should I charge for rent, calculate the total expenses of running the property including things like mortgage payments, property taxes, insurance, etc. If the interest rate on the property is variable, that is also a factor when deciding how much rent should I charge. Using the return on investment principle, you may determine that you want to make a profit of 10 percent. Add the desired return on investment to the expenses for the property and see if the rental amount meets the percentage amount discussed above.
Another important consideration when determining how much rent should I charge, is the tax implications. You will probably want to get expert advice in this matter so that you are aware of any tax liability you may incur. When you make a profit on a property, it can be taxable income. In addition, not every expense may be tax deductible.
As you can see, when you ask the question of how much should I charge for rent, the answer is not a simple one. There are many variables to consider. We urge you to take advantage of the LandLordStation.com community of independent landlords and property managers when you have a question. You will find a group of experienced landlords that are happy to share their expertise with anyone who is new to rental management. With the tools provided by LandLordStation.com, you are sure to be a success.
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