8 Tips to Establishing Rental Price
- Establish the Number of Houses Available – Look on Zillow, Craigslist, and Trulia to see what other house are currently available.
- # of Houses Available to Rent – Look at all the houses available, the highest for rent and the lowest.
- Determine your Comps (Comparables) – Look at houses with similar numbers of bedrooms, bathrooms, and square footage. It is important to note that single family houses versus townhouses often rent at different rates.
- School Districts – Make sure you are comparing the same school districts. Districts with different ratings will affect the rental value.
- Location – Houses on busy streets, near railroad tracks, around apartment complexes, etc., reduce rental values so take that into consideration too.
- Days on Market – If a house is listed for rent at a higher value than the others and has been on the market for a long time I would consider it an outlier.
- Time of Year – If it is off season it can take longer and rates can be lower. You should always compare your rental price to others before you set it.
- Desperation – How quickly do you need to rent the house? You are better off renting it $50-$100 under market than letting it sit empty for a month. If I have lots of time (1-2 months) I try the higher end of the market, if I have little time (less than a month) I usually aim below or at market.
Most Important Take Away:
Your house sitting empty is your biggest enemy against your bank account. You are better off under-pricing your house “slightly” and having it filled immediately than letting it sit empty! In my experience, if you are not getting showings or are having lots of showings with no interest, you are priced too high.0
Nathan Garrett says
Great blog and some great tips here for determining market rents! We should be careful with how we define “comps”. Comparables can only be derived from information about completed sales or leases. Often times the “asking rent” will differ from the “contract rent” so that is important information to have.
I have enjoyed reading your posts!
Home Finders Leasing and Management, Inc.
Thank you for the awesome feedback and comments.
Gary Ward says
f landlords follow all of those tips, I’m sure they will set a right price for vacancy.
To check rentals on websites, such as Craigslist, Zilow, Trulia is one of the the best ways to find what the going rate for any rental in any area. I would like to add Rentberry to this list. It’s also a property rental website which shows the initial price for vacancy as well as one at which property was rented. So, such service can be helpful when a landlord sets up a rental price.
Elizabeth Bennett Colegrove says
Thanks for the tips about Rentberry. I haven’t heard of that rental website yet. I will have to check it out!