How to Balance Your Approach to Choosing a Rent Rate

rentIf your options are to receive more rent rather than less, that makes sense, doesn't it? To an extent, you'd be right, but when you're choosing what to set the rent rate at you'll want to take several things into account.

A higher number on the monthly rent may look great on paper, but that's only if you can get it. Some markets are booming and you can get away with asking for a little higher price for rent and still receive enough applications that you can choose the right tenant for the property, but in other slower markets you might find a better quality tenant that will pay every month by simply dropping the price a little on the listing. It's a balancing act between not cutting yourself short and finding quality tenants that will actually pay the rent. Remember, a higher rent rate is great as long as someone pays it on time and every month.

When you're choosing what to set the rent at you'll want to do some research. Check out the other rentals in your area with the same basic amenities as yours. You may choose to lower the price just a little from market value so that you can stay competitive, but don't lower it too much or it may be seen as a potential scam.

Choosing to prorate a new tenant's first month of rent if they move in mid-way through the month is a common practice that will show the tenant that you're a fair landlord. Check out a great article on BiggerPockets about the best way to prorate rent.

POSTED September 02 2014 2:23 PM

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