How to Set Rental Rates for Your Properties
Price from comparable units that recently leased, adjusted for differences, correct it with listing response, and keep renewals within state caps and notice rules.
Set the rent from comparable units that actually leased in the last few months, not from asking rents: adjust each one for differences in utilities, concessions, size, and features, then price near the adjusted rents of the closest matches. Track the inquiries and showings it draws, and cut the price at a set date if it lags your comparables. For a renewal, the increase must fit any state or local cap and come with the written notice your state requires, such as 90 days in Oregon and Washington.
Find comparable units that actually leased
The form appraisers fill out when a lender needs a single-family rental's market rent, Fannie Mae Form 1007 (Freddie Mac Form 1000), shows the method. For each comparable it records the lease start and end dates and the monthly rent, subtracts any utilities or furniture included in that rent, and then adjusts for rent concessions, location, design and appeal, age and condition, room count, and living area. Adjustments are made only for differences large enough to matter.
To find three to five comparables:
- Match the basics: same property type, the same bedroom and bathroom count, similar size, and the same neighborhood or school area.
- Use leased rents: your own recent leases, local property managers, and listings marked as rented. An asking rent is not a lease rent, so call the agent or manager and ask what the unit leased for, when, and with what concessions.
- Note what each rent includes: utilities, parking, appliances, and furniture.
For a free cross-check, HUD's Small Area Fair Market Rents estimate the 40th percentile gross rent, meaning rent plus utilities, for standard-quality units by ZIP code and bedroom count; the fiscal year 2027 figures are published. Subtract the utilities your tenant pays before comparing. How to analyze a rental property market covers the wider market data.
In New York, do the comparison yourself: since December 15, 2025, a landlord there may not knowingly or recklessly set or adjust rent, including renewal rent, based on recommendations from software that collects rents, supply levels, or lease dates from two or more owners and recommends rents (General Business Law section 340-b).
Adjust each comparable: a worked example
Your unit is a 3-bedroom, 2-bath house of 1,450 square feet with an attached garage and its original kitchen, and the tenant pays all utilities. Three similar houses nearby leased between July and September 2026:
| Comparable A | Comparable B | Comparable C | |
|---|---|---|---|
| Lease rent | $1,995 | $2,095 | $1,900 |
| Utilities in the rent | None | None | Water and trash, worth $75 |
| Concession | 1 month free on a 12-month lease | None | None |
| Differences from yours | None | Updated kitchen; 150 square feet larger | 1.5 baths; no garage |
| Adjustments | -$166 for the free month ($1,995 × 11 ÷ 12 = $1,829) | -$100 kitchen; -$50 size | -$75 utilities; +$50 bath; +$75 garage |
| Indicated rent for your unit | $1,829 | $1,945 | $1,950 |
Set adjustment amounts from your own market by pairing: find two leased units that are alike except for one feature, and treat the rent difference as that feature's value. Here, B and C, which leased without concessions, point to about $1,950. A's owner offered a free month, so its effective rent was $1,829. List at $1,950, and treat A as the warning sign: if response lags at your check-in date, the market may be closer to A's effective rent.
Read the response and correct the price
Count inquiries, showings, and applications each week, and compare your days on the market with how long your comparables took to lease. Then:
- Few inquiries next to similar listings: check the price against the active listings first, then the photos and description.
- Showings but no applications: look at condition, how the showing went, and your stated criteria before cutting the price.
- Applications that miss your criteria: the price is drawing interest; make sure the listing states your income and credit requirements.
Decide at a set point, such as 14 days after listing. A cut costs its monthly amount times the lease length, while each vacant day costs about 1/30 of a month's rent. At $1,950, a $50 cut costs $600 over 12 months and breaks even if it fills the unit about 9 days sooner; a $100 cut costs $1,200 and needs about 18 days. In Oregon, Washington, and California, a lower starting rent also lowers the base that future percentage caps apply to. Minimizing turnover costs covers cutting the days a unit sits empty between tenants.
Set renewal increases within caps and notice rules
At renewal, start from fresh comparables, then check the legal limits for your unit. Several exemptions turn on the building's first certificate of occupancy, the local approval to live in a newly built unit:
| State | Cap for covered units | Written notice before an increase | Main exemptions from the cap |
|---|---|---|---|
| California | 5% plus inflation, or 10%, whichever is lower, over any 12 months; no more than two increases in 12 months | 30 days if increases over 12 months total 10% or less, 90 days if more; add 5 days if mailed within California | Units under 15 years old; single-family homes and condos not owned by a corporation, real estate investment trust, or LLC with a corporate member, if the tenant got a written exemption notice; a duplex where the owner lived in the other unit when the tenancy began and still does |
| Oregon | 9.5% for 2026 and 10% for 2027; no increase in the first year of a tenancy and only one in any 12 months | 90 days, stating the amount, the new rent, the effective date, and, for an increase above the cap, the facts supporting the exemption; add 3 days if served only by first-class mail | Units whose first certificate of occupancy was issued less than 15 years before the notice |
| Washington | 9.683% for 2026 and 10% for 2027; no increase in the first 12 months of a tenancy | 90 days, on a notice substantially matching the state form and served by a method the law allows; the increase cannot take effect before the lease term ends | Units 12 or fewer years past their first certificate of occupancy; some owner-occupied homes, and 2-to-4-unit buildings where the owner lived at the start of the tenancy and still does |
| New York | No statewide cap for most market-rate units; under the Good Cause Eviction Law, in New York City and opted-in cities, an increase above 5% plus inflation, with that threshold capped at 10%, is presumed unreasonable for covered units; if a tenant disputes an increase, a court decides, weighing your property taxes and costs such as major repairs | 30, 60, or 90 days for an increase of 5% or more, based on how long the tenant has lived there or the lease term, whichever is longer: under 1 year, 1 to 2 years, or 2 years or more; the notice must state whether the unit is covered by Good Cause, why if it is exempt, and, for a covered unit, the reason for any increase above the local standard | Good Cause: in New York City, owners of 10 or fewer units in the state; buildings first certified for occupancy on or after January 1, 2009; condos and co-ops |
City rules can be stricter. In California, a unit covered by a local rent stabilization ordinance with tighter limits follows the local rule instead of the state cap, and the Department of Real Estate's guide lists the cities with one. California also leaves the first rent of a new tenancy to you; its cap applies to increases after that rent is set.
Under a 9.5% cap, an $1,800 rent can rise to no more than $1,971, but a smaller increase can earn more once you count the cost of a move-out, as the break-even in tenant retention strategies shows. Send the renewal offer and any lease changes in writing, following lease management: renewals, amendments, and terminations. For how pricing fits the rest of running a rental, see self-managing vs hiring a property manager.
Sources
- Single-Family Comparable Rent Schedule (Freddie Mac Form 1000 / Fannie Mae Form 1007) (Freddie Mac and Fannie Mae)
- Fair Market Rents (40th percentile rents) and Small Area Fair Market Rents, FY 2027 (HUD Office of Policy Development and Research)
- California Tenants: A Guide to Residential Tenants' and Landlords' Rights and Responsibilities (2026), Rent Increases (California Department of Real Estate)
- Rent Stabilization: maximum annual rent increase for 2026 and 2027 (Oregon Office of Economic Analysis)
- ORS 90.323, Maximum rent increase; notice (Public.Law (Oregon Revised Statutes))
- HB 1217 Landlord Resource Center (maximum rent increase for 2026 and 2027) (Washington State Department of Commerce)
- Chapter 59.18 RCW, Residential Landlord-Tenant Act (RCW 59.18.140 notice of rent increase; RCW 59.18.710 exemptions; RCW 59.18.720 notice form) (Washington State Legislature)
- New York Real Property Law section 226-c, Notice of rent increase or non-renewal (New York State Senate)
- New York State Good Cause Eviction Law (Office of the New York State Attorney General)
- S7882 (2025), adding General Business Law section 340-b on algorithmic rent-setting (signed as Chapter 437 of 2025) (New York State Senate)
Financial Disclaimer: Tellus provides this content for informational purposes only. This is not financial advice. Financial returns and mortgage terms vary based on individual circumstances and market conditions. Consult a qualified financial advisor before making financial or borrowing decisions.
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