Investor Resources

How to set your rents to make sure it’s not too low or too high

How to set your rents to make sure it’s not too low or too high
Download Investor Resources

Renting out investment homes is a terrific method to earn passive income while keeping ownership and control of your property.

Table of Contents - How to set your rents to make sure it’s not too low or too high

However, determining how much you should charge for rent might be difficult. You want to make enough money on your property to meet your owner's expenses, plus a little extra to generate positive cash flow.

It's not easy to find the magic number. You may obtain a rent amount that is affordable for your tenants and profitable for you as a landlord by considering a few things.

Consider these factors while deciding on a rental price.

Before you can calculate the appropriate rental rate for your property, you must evaluate several factors. Understanding these elements will help you determine a rent that tenants will consider reasonable, and that will provide you with a steady profit:

If you're looking save time, grow your net worth quickly and become a better investor without all the mistakes, using stocks & real estate as the vehicle for wealth, then click the learn more button to join our members only investing group where we show you our most profitable strategies and connect you with industry experts. FREE 14 day Risk-Free Trial.

Learn More

Specifications of the property

When it comes to setting rent at your home, the essential factor to examine is the property's specs. A rent assessment will consider the number of bedrooms and bathrooms, the age of the unit, the square footage, and the interior characteristics.


The time of year has a significant influence on rental rates. During the summer, demand for rental properties is often highest. Therefore tenants are willing to pay higher prices. Set lease terms that expire during the summer months, so you can re-lease when rental rates are higher to ensure that you can create plenty of interest from tenants.


Your property's area will have a significant impact on the rental rate you can demand. You'll be able to advertise your property at a greater rate if it's in a famous metropolitan region than in a more rural area. The rent will be affected by your property's proximity to local attractions and amenities.


If you want to determine a fair and competitive rental rate, you must conduct market research in the area where your property is located. Look at several listing sites and classified advertisements to see the going rate for similar homes to yours.


The cost of utilities is another significant component that varies greatly based on your property's location and the size of the unit or home you're renting. You can use historical utility costs to estimate how much utilities will cost on average for future renters. Many renters prefer the simplicity and predictability of utilities included in their rent, which allows you to incorporate this cost in the rent.

How do you figure out how much rent to charge?

It is time to locate that magic figure once you've gathered the fundamental points about your home and determined the components that go into determining rent. Here's how to go about negotiating a rental rate:

Take note of all the features and benefits

To help you figure out what a reasonable price is, make a list of all the features and amenities that your property has to offer. The amount of bedrooms and bathrooms in your rental, as well as whether it has shared or private outdoor space, the location, and any recent interior changes, should all be considered. All of this factors towards choosing a fair rental rate.

To get a second opinion, do the following

It's worthwhile to get a second opinion from a professional familiar with the market and has first-hand experience with tenants looking for rental properties in your area. A broker will be able to provide you an unbiased assessment of how much rent is appropriate for your property. You can still rely on an agent for a value estimate even if you don't hire them to assist you rent your property.

Be adaptable

Regardless of how much research you do ahead of time, you may realize that your rental listing isn't attracting much attention from potential tenants. In this situation, you may need to change your rental pricing to reflect the market more accurately. You should be willing to make minor changes to your listing to improve its performance and generate more interest from potential renters.

Renting is all about doing your homework and making adjustments as needed. You don't have to stress about finding the ideal rental rate right away—stay consistent and maintain your pricing reasonable to make your home competitive. Rent research, establishing, and modifying can help you keep your rental property in good shape and generate positive cash flow.

How To Raise Rents The Right Way?

Interested in Rental Property Financing? If so, contact us and we will show you how you can buy unlimited rental properties with great rates.

Contact Us

This article was updated on
Download Investor Resources

You may also like: