How Much Should I Charge For Rent?
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Example Rent Report
723 Mane St, Tampa FL 33626
Range of rent prices in the area for similar properties.
Median Rent
$1,620
$1,600
25th Percentile
$1,108
75th Percentile
$1,850
Results based on 27 rental properties with 1 beds and any baths within a 1 mile radius.
How Much Rent to Charge: Landlord Guide to Rental Rates
Why is it important to know how much rent to charge?
Setting the right rental price is crucial to maximizing your income as a landlord or real estate investor. In the latest TransUnion report, payment problems were the top concern for 84% of property owners.
Charging fair market rent attracts good tenants who will pay on time and renew their lease year after year. However, these rates may not be enough to cover your operating costs.
On the other hand, setting your rent is too high can force your best tenants to look elsewhere while your rental property sits vacant for months. In addition to vacancy costs, higher rent prices may also result in evicting tenants for unpaid rent, which can cost between $3,500 to $10,000.
As a landlord or real estate investor, there are three rules of thumb to follow to determine how much rent to charge:
- Minimum rental rate: The lowest amount that will cover all your expenses and generate a profit.
- Maximum rental rate: This is the highest amount you can charge without pricing yourself out of the market.
- Rental price per square foot: This is a standard way of determining how much rent to charge based on the square footage of the property.
Depending on market trends, some landlords adjust the monthly rent downward, provided that property expenses are covered, and a profit is still being generated. Adjusting your rents a bit below fair market prices can attract a wider range of prospective tenants while still generating a solid net operating income on your rental properties.
