Trying to set the right price for your rental might seem tricky, especially if you’ve been out of the rental market for a while, or are renting a property in an area you’re unfamiliar with. If you charge too little, your property will rent quickly, but you’ll miss out on valuable income. If you charge too much, it might take a long time to find a tenant. Depending on median incomes for your rental location, you can find a good fair market price with a just a little research and local comparisons.
Low- to Middle-Income Areas
Navigate to the huduser.org website. The U.S. Department of Housing and Urban Development publishes fair market rent values for every state each year. Fair market rents on this site represent amounts that 40 to 50 percent of the people in your area pay based on the size of the rental.
Click the “Data Sets” tab at the top of the screen and select “Fair Market Rents” from the drop-down menu.
Click the link “Access Individual Area Fair Market Rent and Income Limit Histories.”
Press the “Summary FMR and IL Information” button.
Select your state and county and press the “Next Screen” button. Your results show the market rents for studio and one to four bedroom units in your county.
Adjust for the location of your rental, amenities and upgrades. For example, if your rental is in a great neighborhood, you can add about $25 per month to your rental price. If your rental is an older property without upgrades, subtract $50 to $100 per month from your price.
Moderate- to High-Income Areas
Browse local rental listings in the newspaper or online classified communities or search listings advertised by local real estate companies.
Look at the rental price for properties similar to yours. Comparable properties should have the same number of bedrooms and bathrooms and be located near your rental. Select a base rent for your property that is competitive for your market.
Adjust for additional amenities your property has, or lacks from similar listings. For example, if your rental doesn’t have a garage, but other comparable rentals do, subtract $25 from the average market rent for your area. Similarly, if your property has upgraded features and other properties don’t, add an extra $25 to $50 per month to your rental price.
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