If you’ve ever wondered, “How much can I rent my house for?” you’re in the right place.
Renting out your property can be a high-paying side hustle to generate extra income or even turn it into a full-fledged business venture.
But determining the optimal rental price isn’t always a walk in the park. It involves several factors such as location, property size, local market trends, etc.
Don’t worry, though! In this blog post, we’ll guide you through figuring out the perfect rental price for your house. So sit back, and let’s dive into the fascinating world of rental pricing!
- Your house’s rental price depends on location, size, condition, and amenities.
- Market trends, average rent prices, and local rent control laws significantly impact your potential rental income.
- Economic conditions in your area can influence how much you can charge for rent.
- Unique property features, like being furnished or proximity to facilities, can justify higher rent prices.
- Supply and demand dynamics in your rental market will also affect your rental price.
How Much Can I Rent My House For?
If you’re considering becoming a landlord and renting out your home, you may wonder, “How much can I rent my house for?”
The rental market can be confusing, especially for first-time landlords, and houses for rent aren’t a “one price suits all” situation.
However, some research and guidance can help you determine a fair rental price for your home.
Rental prices vary greatly depending on various factors such as location, size, amenities, and nearby attractions. Also, remember that rental prices fluctuate based on supply and demand.
In a highly competitive market, you’ll be able to charge more, but in an area with low demand for rental properties, you may need to lower your rental price.
6 Pricing Strategies For Rent
Setting the right rental price for your property is crucial to becoming a successful landlord. It’s a delicate balance between covering costs, attracting the right tenants, and maximizing profits.
You can use several strategies to achieve this balance, each with advantages and considerations.
Let’s delve deeper into these strategies and understand how they can help you set the optimal rental price for your property.
1. Use A Rental Calculator
An online rental property calculator is a valuable tool when figuring out how much to charge for rent and gives you an idea of your potential rental income.
The calculators use algorithms with various factors, such as property location, size, and number of bedrooms, and compare your place with similar properties in the area to provide a suggested rental price.
They’re easy to use and can provide a quick estimate, but they may only account for some of the unique features of your rental property or the specific dynamics of your local rental market.
For a more detailed analysis, some rental calculators allow you to factor in additional costs like your mortgage, property tax, homeowners association (HOA) fees, and more.
2. Cover Your Mortgage & Home Costs
One of the most fundamental considerations when setting your rent price is ensuring it covers your mortgage and other related costs.
Your mortgage is likely your biggest monthly expense, and you can potentially rent out even one room to cover your monthly mortgage payment.
But it’s not the only cost you must consider getting covered by tenants’ rent.
Property taxes, insurance, maintenance costs, and potential property management companies’ fees must also be included in your calculations for the right rental price.
However, it’s crucial to ensure that your rental rate allows you to comfortably cover these costs without straining your finances.
If you’ve managed to secure a low-interest rate or made a large down payment on your property, you could offer a competitive rent price that still covers your costs.
This strategy can attract many potential tenants, giving you more options for your rental property.
3 Part Of Your Home Value
A common strategy for determining a month’s rent for prospective tenants is to base it on a percentage of your home’s value. Some people stick with the 1% rule.
For instance, if your home’s market value is $200,000, the 1% rule would suggest a monthly price of $2,000.
However, with the changing real estate market, experts suggest a range of 0.8% to 1.1%. If the market value is $200,000, you could charge between $1,600 and $2,200 in monthly rent.
This range allows for some flexibility for rent prices based on other factors, such as the condition of the property, the local rental market, and your financial needs.
Let’s be clear – this strategy is a guideline rather than a hard-and-fast rule since some areas are more desirable than others.
The actual rent price you charge may be influenced by various factors, including where your home is, how well-kept it is, and the features of your home.
For example, if your home is in a highly desirable location or has unique features in high demand, you might charge more than 1% of your home’s market value for the added luxuries.
4. Check House Prices Nearby
One of the most effective strategies for setting your rental listing price is to look at comparable properties, or “comps,” in your area.
It involves researching other rental properties in your area similar to yours that have key features such as square footage, number of bedrooms and bathrooms, and location.
Start by using online platforms like Zillow to find listings that are comparable to yours.
Look for similar properties in your zip code with similar square footage, number of bedrooms, bathrooms, and location. Does your property have any unique features or amenities that could justify a higher price?
For example, having new appliances, a renovated kitchen, or a large backyard are upgrades that could allow you to charge more.
Renters are usually willing to pay higher rental rates for a house with modern amenities that feels brand new and luxuries they wouldn’t have elsewhere.
5. Leave It To A Rental Company
If you’re looking for a more hands-off approach to renting, consider hiring a property management company. These professionals can handle everything from the rent price to tenant issues.
A local real estate agent understands local rent control laws and can act as a buffer between you and your tenants.
This can be particularly useful if you have multiple properties or live far away from your rental property.
However, their services typically cost 8% to 12% of the monthly rental fee. So you may want to adjust rent prices to cover all or part of the fee.
Before choosing a property management company:
- Ensure you understand their process- ask them about their methods for setting rental prices, choosing tenants, handling disputes, etc.
- Make sure you know exactly what services they provide and how much they will cost before you sign any contracts.
Remember, while a real estate professional or property management company can take much of the work off your hands, it’s still your property.
You want to ensure your house is managed in a way that aligns with your goals and expectations- and keeps renters coming in those doors!
Where To List Your House
Renting out your home for extra income has never been easier, thanks to the explosion of online rental platforms.
But don’t worry – we’ve researched for you! Here are three of our favorite sites to rent your whole house or just a room:
Whether you’re considering renting a single room in your home or an entire property, Airbnb makes it possible and profitable.
You get to call the shots regarding how much you charge, what rules you set, and when your place is available.
The process is pretty straightforward. You’ll set up a listing with your rental rate for your space, nice photos, a catchy description, and all your place’s cool amenities.
Once your listing is up, guests can start booking.
And here’s a neat feature – Airbnb handles all the payments, so there’s no awkward money talk with your guests.
Plus, they have a host guarantee covering up to $3,000,000 in property damage. It’s a pretty sweet deal, right?
Have you thought about renting your house out for fast cash? Well, you should consider renting your home to people looking to store stuff instead of living there!
Well, with Neighbor Storage, you can turn those idle spaces into a source of income, including your vacant guest room, unused garage space, and an empty closet.
It’s a pretty cool concept. You see, plenty of people need a bit of extra storage space, and they’d rather rent from folks like us than traditional storage facilities.
What’s great about Neighbor Storage is that they take care of all the payment processing for you. This means you don’t have to worry about chasing down payments or dealing with cash.
Getting started with Neighbor Storage is a breeze. You’ll need to create a listing for your available space, including size and pictures, so people know what they’re working with.
You’re in control here, so you can set your own rental rate based on what you think is fair and reasonable.
And to top it all off, they provide a $1,000,000 host guarantee for property damage, giving you peace of mind.
So, if you’ve got some unused space in your home, why not turn it into a money-making opportunity?
Want to learn more about it and see how much money you can earn? Read our in-depth Neighbor Storage Review!
If you’re looking for a way to generate income from your property, Vrbo, which stands for Vacation Rentals by Owner, is a fantastic platform to consider.
Vrbo connects you with travelers who prefer a home away from home experience rather than a typical hotel stay.
It’s perfect for all properties – from cozy cabins in the woods and beachfront condos to city apartments.
Here’s the scoop. You’ll need to create a profile for your property, complete with photos showing the space, a detailed description, and a list of amenities.
The best part is you’re in the driver’s seat. You set your own rental rate, rules, and availability. Once your listing is up and running, guests can book your property for their vacation.
And you don’t have to worry about handling money directly with guests – Vrbo has a secure payment system. Plus, they offer a $1,000,000 guarantee against property damage.
How To Rent Your House
Maybe you’re moving out of town, or you’ve recently inherited a property that you’re not sure what to do with.
Whatever the reason, renting out your house can be a great way to earn passive income.
But before you jump into it, there are a few steps you should take to ensure that the renting process goes smoothly:
1. Check Your Mortgage & Insurance
Before you consider renting out your house, it’s important to check with your mortgage lender and insurance provider to ensure that you’re able to do so legally.
Some mortgage lenders require that you live in the house for a certain amount of time before renting it out, so make sure you understand the terms of your mortgage.
You’ll also need to notify your insurance provider that you’re renting out the property, as you’ll likely need a landlord insurance policy to cover damages or legal claims that may arise.
2. Prep Your House
Once you’ve gotten the green light from your mortgage lender and insurance provider, it’s time to prep your house for tenants. This includes basic repairs and maintenance, as well as deep cleaning.
Make sure all appliances are in working order and that there are no leaks or plumbing issues. Replace any light fixtures or bulbs and ensure there are no safety hazards on the property.
Once everything is in good condition, thoroughly clean the house, including carpets, walls, and any furniture that’s staying in the rental.
3. Pick Your Rental Pricing
When setting the right rent price, consider your local market, rent control laws, and your home’s condition, location, size, and amenities.
Determine how much rent to charge using one of our methods, like searching for comparable rental properties in your neighborhood.
You can also consult a professional property management company or real estate agent for assistance with rental comps if you want someone else to pick prices and manage the house.
4. Pick Your Rental Platform
Each platform offers unique services, so pick one that aligns with your goals and requirements.
Don’t forget to check review articles and sites like Trustpilot to see how others feel about rental management companies.
5. If Renting Long-Term- Pick Tenants & Get Leases Signed
Once you have offers from potential renters, you may be tempted to accept the highest bidder and get started.
However, screening potential tenants first is vital to avoid leasing your house or rental units to problematic tenants who may not pay rent.
You can conduct a background check, call their references, or request proof of employment. Also, create a rental application to assess their income, credit score, and prior evictions.
If everything checks out, draft a lease agreement, including the rental rates, payment agreements, and tenant responsibilities. Make sure all parties sign the document before handing over the keys.
How much can I make renting my house?
The amount of money you can make by renting out your house depends on various factors, including your location, the size and condition of your home, and current market demand.
Typically, homeowners can earn $1000s per month renting out their house, but there are tools to help you find a fair price for renters.
A good rule of thumb is to charge between 0.8% and 1.1% of your home’s value in monthly rent. So if your house is worth $200,000, you’ll charge between $1,600 and $2,200 monthly.
Do I have to rent my whole house?
No, you don’t have to rent your entire home. Not everyone is ready to buy another home and keep maintaining another one!
In fact, many homeowners choose to rent out a portion of their home, such as the basement or a spare bedroom, while still living on the property.
This is known as “house hacking” and has become wildly popular, and sites like Airbnb are booming with it.
But you also have the option of renting your house for stuff instead of visitors using Neighbor Storage.
How do I safely rent my house?
To make that you safely rent your house, take a few precautions before allowing renters into your home:
- Secure all your valuables and personal belongings you don’t wish to share with renters.
- Always have a written rental agreement that outlines the terms and conditions of the rental period, including any rules related to visitors, damages, and repairs.
- Verify renters’ identities before finalizing any rental agreements.
- When it comes to rent payments, consider doing a credit check.
- Require first and last months’ rent payments upfront to minimize the risk of any payment issues.
Where can I rent rooms or my whole house?
Several rental companies allow homeowners to easily rent their homes, such as Airbnb.
If you don’t want to rent your home to vacationers or long-term rentals, you can rent out rooms or storage space at places like Neighbor Storage.
Determining the rental value of your property is a critical step in the property rental process to make sure you successfully make $1,000+ in passive income.
By considering factors such as research, location, rent control laws, the size and condition of the property, and features and amenities, you can come up with a fair and competitive rental price.
Remember that pricing your property too low can result in missed rental income, while pricing too high can lead to longer vacancy periods.
So, take your time to research and consider all the factors before settling on a rental value. And get on Airbnb and see how much you can make renting your house in the short term!