Deciding what to charge for your rental unit is a tricky decision. There are many factors that affect price, from the current state of the economy to what amenities your unit offers. Read below to learn what you need to consider when deciding the price for your rental unit.
Look at the Market
The best way to set a fair price for your rental unit is to see what the going price is for similar apartments or homes around town. Find something that has a similar location, size, and features to your unit. Learn how much the price will increase if there are extra features such as a washer and dryer in the unit, or if there is an extra bedroom. Really do your research. A rental unit priced too high will be vacant for quite some time, but if you price it too low, you will attract the wrong tenant.
Maximize Tenants Not Rent
It is important that you seek to maximize tenants, not the rent. The best way for your rental to make money is to bring in good tenants who will take care of the unit rather than trying to get every last penny out of those who occupy it.
The location of your rental has a huge impact on its price. A home in the middle nowhere will cost much less than one in the middle of a bustling city, even if they are exactly the same otherwise. Is your rental near a large shopping center, public transportation, or anything else that might bring the price up, or is it quite a ways away? Take a look at other units nearby and see what they are going for so that you can price yours accordingly.
Are You Providing Utilities?
Decide whether or not you are going to include full or partial utilities as part of the rental agreement. If you are, you can raise the price slightly to cover the utilities. If not, make sure that you don’t set rent too high, as it could be a turnoff to potential renters.
Will It Be Profitable?
Your rental unit should turn a profit, if not, you need to either re-evaluate your pricing, or you should sell the unit, as you are putting more into it than you are receiving from it. If you need to, increase the rental price so that you can better pay for repairs, your mortgage, taxes, etc.