When it comes to setting a monthly rental rate for your house, there is a basic equation to follow- you want to make the most money with the least amount of effort. Establishing the ideal rental amount without having vacancies is crucial to making a profit in this equation.
There are factors that will influence the rental price you are able to set for your house, and the most important of these is location. If your house is close to where people want to be (such as a college or university, major shopping area, or office park), or close to a major transportation venue (such as a subway, city bus, or train) you will have the best chance of collecting a higher rent. However, if there are many rental units in this same area, you have to make sure your rental price is competitive. The opposite can also be true- if your home is in a less than ideal location, you may have to lower your rate to attract tenants.
Here are some basic steps for determining the optimal rent for your house:
Even after you have secured a tenant for your home, make sure to re-evaluate your rental rates every so often, such as when the tenant?s lease is up for renewal. Another thing to keep in mind is that the amount of money you rent your house for can impact your property value, which is especially evident if you decide to sell your house. Investors will not want to purchase a property that has a low rate of return.