You probably already have a ballpark rent number, but now’s the time to dig into the specifics to decide how much to charge for rent. To do this, you’ll first want to take a look at nearby homes. What are they renting for? Do they offer better or worse amenities than your rentals?
“No, you can’t just charge “whatever you want.” Rent is dictated by supply and demand—charge too much and you may not get any prospective tenants.”Brandon Turner
When searching for rental comps (or what other rental property owners are charging), there are three places I go.
Craigslist’s map feature is awesome. Start in the “apts/housing for rent” section for your city and click on “Map” in the upper left corner. There, you can see all the nearby rental listings. What are other property owners asking for their rentals in the area immediately surrounding your potential listing?
Many landlords list properties for rent on Facebook Marketplace. You can scan through dozens—or maybe hundreds—of listings to find the average rent is for different types of properties in different locations. The primary downside of the Facebook Marketplace, however, is that there is no “map feature” like you’ll find on Craigslist. But you’ll still get a pretty good idea by clicking around.
Perhaps the best way to get a super-accurate rent estimate is picking up the phone and calling a property manager. Property managers deal with hundreds of rental properties, and are generally more than willing to help you determine rental rates—because they’ll hope you’ll end up using them for management.
What to know before setting rental price
No, you can’t just charge “whatever you want.” Rent is dictated by supply and demand—charge too much and you may not get any prospective tenants. My landlording goal is to charge about the same as everyone else, but offer a slightly superior property. This way, I’ll get plenty of applicants, and they’ll be excited to rent (and stay forever in) my unit.
One thing to keep in mind: It’s against the law to raise the rent before the lease term ends. One way around this is by using a month-to-month rental agreement, so each month is like a new lease. This allows you to change rates as needed, as long as you give proper rent increase notice. (Notice requirements vary by state.) However, this also means the tenant can leave whenever they want as well, so be careful about using month-to-month rental agreements.