Property ManagementHow Much Can I Rent My House For? by Daniela Andreevska September 24, 2016January 28, 2019 by Daniela Andreevska September 24, 2016January 28, 2019So, you are ready to dive into the world of real estate investing? You’ve owned a real estate property for a while or you’ve just purchased a new one to start renting it out? Either case, the most important question which any landlord has to find the answer to is, how much can I rent my house for? Naturally, the rent that you get for your investment property will be one of the major determinants of your profit, together with the mortgage as well as the other expenses associated with renting out a property.When you are trying to figure out the answer to the typical “how much can I rent my house for” question, remember that as a landlord, your goal should be to maximize the profit you make from your rental property, not to maximize your rent. The US real estate property market is a rich one, which means that there are lots and lots of properties being offered for rent at any point in time. This means that you will face a lot of competition as a landlord, so you need to be careful not to set a rent that’s too high and would not be attractive for renters.You may decide to rent your house traditionally or through Airbnb. Either way, here are the steps to calculating how much rent you can charge.How Much Can I Rent My House For Traditionally?1. First, you need to figure out how much your rental property is currently worth. Remember that this might and will most probably be different from the price that you paid for your house. To do this, you need to perform a real estate market analysis. The current value of your property will depend on its size, location, condition, age, amenities, features, recent improvements, nearby infrastructure, etc. You can use Mashvisor to quickly analyze real estate markets nationwide.Related: How To Perform A Real Estate Market Analysis.2. Usually the rent that landlords charge is a percentage of the real estate’s market value. The monthly rent typically falls between 0.8% and 1.1% of the home’s current value. For example, if your home costs $150,000 at the moment, you should ask for rent in the range of $1,200-$1,650.3. As a rule of thumb, for cheaper properties – about $100,000 or less – you can ask for a monthly rent close to 1% of the home’s value. At the same time, for more expensive properties – especially those above $350,000 – you have to charge a rent closer to 0.8%. Otherwise, you risk not being able to find renters because of the very high rent.4. Your reason to become a landlord should also factor in determining the rent you ask for. If you decided to rent out your property so that you don’t have to pay for your bank loan from your other sources of income, then the rent should be equivalent to at least the monthly loan payment. Nevertheless, you can’t charge rent solely on the amount of your mortgage payments, you have to keep the rent attractive and comparable to other similar properties in your area.5. One simple trick to increase your profit a bit is to include the utilities in the monthly rent. Take advantage of the fact that you know how much you have been paying for utilities in this home (if you used to live in this house). So, if your average cost of utilities has been $120, you can easily make $30 extra per month by increasing the rent by $150 and including the utilities in the rent.6. You should also consider upgrading your rental unit. This is really an investment as you can increase your profit by bringing the monthly rent up after buying a new stainless steel fridge or dishwasher, let’s say. Similarly, adding some low-cost furniture can lead to higher monthly rents.Alternatively, you might be looking for renting out your investment property on Airbnb.How Much Can I Rent My House For On Airbnb?Offering your house on Airbnb gives you some flexibility in setting the rent which you can’t enjoy in traditional renting. Related: How do I price my Airbnb property? 1. You can get a rough estimate of how much you can charge per night if you divide your monthly rent (see how to calculate this above) by 30. This may seem too simplistic but at least it gives you a basic idea of how much you can charge.2. Check out other comparable listings in your area to get a feel of what rents are in your neighborhood. You can’t ask for more than what everyone else is already charging unless you offer more than they do.3. If you are new to this, start low. You need to focus on getting your first happy guest who will provide you with the first positive review. If you are new to Airbnb renting and your property has no reviews, you are less likely to get a lot of customers, so you need to work on accumulating a few positive reviews, which will then attract more people to your business. Even if this means lowering your estimated rent a bit.4. Once you’ve had a few happy customers, try to raise the rent a bit. If people are still willing to rent your property, it means that you can try out another rise. On the other hand, if customers stop coming in after a price hike, then you are probably asking for too much.5. Once you’ve set a rent estimate, it is a good idea to factor in a security deposit. This is different from insurance and covers such things as broken chairs, destroyed floors, stolen dishes, and others. You may never need this, but it is good to be on the safe side. The size should be about the value of one night rent.6. Many first-time landlords overlook the cleaning fee when they create their first listing. Whether you decide to do the cleaning yourself or hire someone to do it for you, this will cost money. So you absolutely have to have a cleaning fee to cover for this expense. This will vary largely depending on the size of the property, but $50 is a good starting point.7. You can also choose to charge additionally for any extra guests. If the size of your rental property provides for two guests to stay comfortably, you can allow a third and a fourth person in for an extra charge. The rationale for this is obvious as more people create a higher chance for something to go wrong.8. Another must is different prices for special events, holidays, high season, and weekends. In this manner, Airbnb renting is very similar to hotels. Your price should be driven by demand. When demand is high, the rent can also be higher.Finally, when deciding “how much can I rent my house for” on Airbnb, you should keep in mind that setting the rent is not a one-time decision. You should keep an eye on the market and the demand all the time and adjust your price accordingly. Start Your Investment Property Search! START FREE TRIAL LandlordMaking MoneyRental CompsRenting Out 0FacebookTwitterGoogle +PinterestLinkedin Daniela AndreevskaDaniela is Marketing Director at Mashvisor. She has been writing about real estate investing for a number of years. Previously, she worked in economic policy research and fundraising. Daniela holds a Master degree in Middle East and Mediterranean Studies from King’s College London. Previous Post How to Buy a Foreclosure as an Investment Property Next Post Is it a Buyer’s Market or Seller’s Market? 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