How Should You Determine the Rent Price?

When deciding how much to charge for rent, you need to take location into account. Are you in a busy urban area where people will pay high prices? Is your property within walking distance to nightlife and entertainment? Is it close to the best schools?

Once you know how your property fits into the bigger picture and nearby amenities, you should find out how much rent similarly situated rentals are charging. It's important to know how competitive your property is as opposed to other properties with similar amenities and the same number of bedrooms and bathrooms. Once you've gathered enough information, you can use your competitors' rent as a benchmark and decide whether you can charge additional rent for the extra features your property offers, such as an in-unit washer and dryer, covered parking, or a fenced backyard.

In addition to researching your neighborhood and your competitors, you should also understand your local market and rent trends. You should know if rents in your city are rising or falling overall and by how much. Also, you should know if rents are projected to increase or decrease. Some cities like San Francisco and Seattle are hard to pin down at first because rents are rising so quickly.

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While market-level information is helpful, make sure you're setting a competitive price by comparing your property and amenities to similar opportunities in the area. Ultimately, you will get to decide how much rent to charge your tenant and whether to increase or decrease your rent in the future.