Are you a first time landlord?
Did you find yourself renting out your previous primary residence after purchasing a new home? Just purchased your first investment property? Renting out a vacation property? Don’t leave money on the table or ask too much rent then you risk your rental property being vacant for a long period of time.
What is the cost of owning the investment property?
Figure out your total cost of owning the property before you begin to determine how much to charge. This will give you a baseline to start but is not a dictation of what to charge. Include (overestimate a little) mortgage payments, any utilities you pay, legal/accounting fees, maintenance costs.
You can estimate rent rates based on the value of the property.
Some of the rules of thumb are for homes/investment properties up to $100k, you can charge 1.1% of the homes value for rent. For properties more expensive the percentage may be .75%. This all depends on the rental pool. The rental pool is expanding now due to the foreclosures and Short Sales in our real estate market but home values are still decreasing in most areas.
Take a look at renters in the area.
Look at who is renting in your investment property area and see what the rentals are going for. Check out Craigslist, call on signs, check ads in the paper, Realtor.com, and other sources. If you have a non-conforming property for the area it may not get the rent you desire. Like a 5 bedroom home in an area of 1-2 bedrooms with students or single people etc.
What are your rental strategies and goals?
First look at your goals and what you are trying to accomplish with your investment property before setting a rental price. Are you looking to recoup as much of your monthly investment? Are you looking to just take the tax advantages of owning an investment property? Are you looking to make a profit on the unit monthly? If you charge too much you risk the property being vacant for a longer period of time, but if you charge too little you may not have long term tenants.
Any of my team members or myself on The Julie Anne Real Estate Team can help you with any and all of the questions you may have on rental/investment properties. We can help you find one or many and help you secure a tenant. Contact us today.