DIY Landlord Tip of the Week: How Much Rent Should I Charge?
One of the questions our team at Charleston Property Company gets most often is “How much rent should I charge?” Or, “How do I get the highest rent for my home?” As in other areas, rent in Charleston is based on the property, local market supply and demand, and advertising.
Property
When considering how much rent to charge, start with this easy rule of thumb: 1 percent of the value of the home. This means that an estimated monthly rent for a $100,000 house is $1,000. This percentage actually can fluctuate between 0.8 and 1.1 percent and for more expensive homes, the percentage may be slightly lower as the pool of tenants is likely smaller.
Keep in mind this tip is based on the property’s value—not your mortgage payments. So, before you make any real estate decisions or investments, make sure the local rental market commands the amount you need to cover all expenses.
Supply and Demand
DIY Landlord Resources: Where can I compare my home to other properties?
- Padmapper – Uses properties for rent on Craigslist to populate a map based on zip code.
- Rentometer – Compare rental rates
- Zillow – “Rent Zestimate”data can be found by entering any address into their search.
Advertising
Proper marketing is actually a key component that yields the highest rent, least time on the market and the most money for the landlord. Tips for a good marketing plan: Be active: post your rental on the major online listing sources (Craigslist, Trulia, Zillow, Hotpads, and military and college websites) and use high quality photographs to highlight the property. Be aggressive: once you determine the rent to charge, reassess the response you receive each week from potential tenants and adjust the price accordingly.