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How Much Can I Rent My House For?
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:
- Look at the local and regional classifieds for houses of similar square footage, number of bedrooms and bathrooms, yard space (if applicable), and features. This should give you a good idea of what other landlords are charging for rental houses. Using the same approach, check out various web sites dedicated to rental properties such as Craigslist, Yahoo groups, and Google groups.
- If you feel comfortable doing so, ask your neighbors if they are renting their property and if so, how much they pay each month in rent.
- Ask friends and family for their advice or experience in renting their houses. You can also contact a local real estate agent- they are usually willing to share advice and opinions if they have the time. Chances are you probably know someone that is a real estate agent- don?t be shy. Call and ask if you could get their professional opinion about renting your house, and bounce rental rates off of them for suggestions.
- If your house hasn?t been appraised for a long time, consider hiring an appraiser. He/she can give you an accurate value of your house in addition to checking on the rental rate of your neighborhood.
- For a basic approach, place ads at your ideal rental rate, and lower the rate until you find a tenant.
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.