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How
Much Rent Should I Charge for a House / Home?
Landlord Tenant Guide PART 1
"How
much rent should I charge my tenants for a rental home?" Our landlord
tenant guide will reveal the answer to this question and show you how
much rent to charge for a house. Find out what is the
perfect rent that will maximize your rental profits while keeping your
vacancy rates to the minimum.
Just like other many decisions that you will have make as a landlord,
it's
important to get your facts first before jumping in. Read our landlord
tenant guide and find out how much a
landlord should for charge for rent:
Make
Use of Your Home Value as a Rough Estimate of the Rent Amount
If you
still have no idea on how much
rent to charge for a home, a good
place to begin will be the home value of your rental property. Some
professional landlords recommend this method as a crude measuring stick
for your rent.
The general rule of thumb for rent charging is to set your monthly rent
equal to 0.8 to
1.1% of
your rental property's home value.
The
higher your home value, the lower your rent percentage is likely to be.
If your home value is $100,000 or less, the estimate of your monthly
rent can hover around 1%+ which will work out to be $1,000 or less. If
your home value is $350,000 or more, it's probably more feasible to gun
for about 0.8% which is equal to a monthly rent of $2,800 or more.
In
general we do not recommend charging a monthly rent that is
less
than 0.8% of your home value because you will have a safety net to
protect your profits against interest rates increases, major repairs or
long periods of vacancy.
Do
remember
this method is only helpful
as a rough estimate for answering the question of "How much rent should
I charge for my home?". Never rely on it alone to decide on your rent
amount.
Compare
the Rent of Similar Rental Properties in Your Neighborhood
Comparing
rent prices may seem like a piece of cake but there are still things
you will have to watch out for.
Always
compare apples to apples and pears to pears when it comes to how much
rent to charge for a rental home.
The rental
properties that
you use for comparing should be of similar type, size and
condition as your own. On top of that, you should only look at recent
rent prices
(in the last 3 to 6 months) in the same
neighborhood.
How do you get your hands on the information required for comparing
rent prices?
Browsing
through the
classified ads in your local newspaper is the traditional way but it
remain highly effective till this day. If you want to save time
and money, Check out your local newspaper's website to see if they
have an online version of their classified ads.
Nowadays landlords also have the luxury of searching and
comparing
rent prices with online landlord tenant guides. The more popular
websites include Realtor.com and Apartments.com.
These sites are highly helpful as a landlord tenant guide on how much
rent to charge your tenants since
their listings tend to contain more details and photos.
If your rental property is in the United States, the HUD
User
website will be another helpful place to carry out your rent research.
This government website will regularly publish the updated fair market
rent for different areas in the United States. Even if you are not
renting out your property to Section 8 or subsidized tenants, it's
still a good place to look.
Now that you
know how much rent to charge for a house, do you tell if your rent is
too high, too low or just right?
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