How much can I rent my house for? Great question. Let’s find out.
Figuring out the right amount to charge for rent can seem tricky. The longer your property sits vacant, the more money you lose, so you don’t want to ask too much. However, you also don’t want to ask too little, and miss out on rent income.
So, how do you arrive at that perfect amount to ask for rent?
In this post, I’m going to give you 3 tips to follow to make sure you’re asking an amount of rent that is fair for you and reasonable for prospective tenants. Let’s get started.
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Tip #1: Check DOM for similar rental properties
DOM is a real estate term that stands for “Days on Market.” DOM can give you a good indication of how well the market is responding to what other owners/landlords are asking for rent. Here’s how you can use DOM to determine how much you should charge for rent.
Go to Zillow or Trulia, and filter to rental properties in your area that are very similar to your property. What’s the average rent amount being asked?
Once you’ve determined the average rent, then look and see how long these properties have been sitting on the market.
If all the properties have a low DOM such as a week or two weeks, then that gives you somewhat of an indication as to how long it would take to rent your property at the price these other owners/landlords are asking.
Tip #2: Use a rental calculator
There are also a few free rental calculators you can use, but I wouldn’t put too much stock in the data. As someone who has owned nearly forty rental properties, I oftentimes get far more rent than what these calculators estimate. Use the calculators as a starting point. Here are a few calculators to check out:
Tip #3: Use the 1% rule
If you want to keep things simple, just follow the 1% rule. This rule basically states that monthly rent should be at least 1% of the property’s value. So, a property worth $100,000 should rent for at least $1,000/mo.
Promote heavily & get quality tenants sooner
The more exposure your rental property gets, the sooner you will get it occupied. It’s that simple. To get maximum exposure, your property needs to be listed on sites that renters visit to find rental properties.
To do this, you need software, and I strongly recommend Buildium.
I started with Buildium when I only had two rental properties, and as I quickly scaled to nearly forty, Buildium scaled right along with me. Buildium provides so much value for landlords. Here are my four favorite features:
You can try Buildium risk-free (no credit card required) by activating a 15-day free trial. After the trial ends, they’ve got plans starting at $45/mo. Trust me, the $45 will more than pay for itself.
Forget manually listing your rental property on different sites one-by-one. Create your listing once in Buildium, and Buildium will push your listing out to major real estate sites within minutes. For me, that’s all the marketing I do, and I’ve had no problem keeping my properties rented.
Buildium’s tenant screening is fantastic. Buildium works with Transunion Smartmove to ensure you get a full credit report (with credit score), criminal history, and any prior evictions.
Online Rent Payments
Collecting rent payments online with Buildium is completely hands-off for landlords. Tenants will get their own online portal where they can log in and make payments.