Property Taxes & Finances Blog | All Property Management

How to Calculate Fair Market Rent

| 1 min. read

When determining a fair market rent for a property, one useful resource is the U.S. Department of Housing and Urban Development (HUD). The agency typically has data regarding rents in any given market throughout the country.

This does not give an exact value, particularly since appropriate rents will vary depending on the neighborhood and condition of a property, but can be a useful starting point.

Methods to Calculate Fair Market Rent

  1. Examining other rental properties in a neighborhood is sensible. Those which are occupied likely have reasonable rent prices close to fair market value.
  2. If a property has been vacant for a long time, then its rent is likely too high. Similarly, those that are vacant very briefly may be under-priced.
  3. When comparing a rental to one's own property, learn about its amenities and location rather than assuming a similarity. It may be in poor condition, or have a better view than expected.
  4. Remember to determine whether utilities are included in a rent price when using it for comparison. Similarly, any appliances, furniture or other items included in a lease may justify a slightly higher rent.

Last, consider hiring a property manager to help you calculate fair market rent. Among their other services, property management companies should be able to calculate pricing for housing that they are operating. When you're ready to start your search, All Property Management will be here to help.

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