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How can I determine how much to charge in rent for my rental?
Today we are going to answer this question by first explaining a few things to not do. What not to do: my mortgage is X, and so my rent should be this. Some people make this mistake by looking at their mortgage payment, and if it’s a $1,000, they say, “Well, then, I need to rent it for 1,200 so I can cover my costs.” Mortgages and rent amounts do not coincide, typically. It’s not going to a reflection of what your mortgage is and inflated by so much. They’re independent numbers and figures. We’ve seen mortgage payments in the amount of $3,000, but only able to get 2,200 in rent, for example, or vice versa. They’re not necessarily correlated.
Second one is: I think it’s worth X, without doing any real research or looking at comparables and things like that. You want to educated on the rents and how much you really should be charging. Here are a few things to do. Look at local comparables. Look on your local classified sites for properties in your area or the area of your rental and look at what things are going for. Look at the pictures. See if the amenities are similar and get an idea based off of that to be a little bit more educated. Talk to a local property management company. These guys will be able to tell you, as well as provide you with typically a free rental analysis so that you can see how much rent would be reasonable.
Get a free estimate, or a free instant rent estimate, then verify. We have one on our website, as well as there’s companies like Rentometer and other companies out there that will give you free estimations of the rent. Now, the one from our website looks similar to this. It will provide with different benchmarks, days on [inaudible 00:02:04], days on market in different counties, as well as an automated rent estimate, it might be hard to see in the video, and a confidence score, and a few other statistics showing what we anticipate being able to get in rent. Now, should also be verified with local comparables, because, of course, this is pulling from a different subset of comps that you want to make sure that you verify with some current ones as well.
Hope this is helpful. If you have any questions or if you’d like an evaluation of your property, feel free to reach out to us. It’s no obligation. It’s one of the complementary services that we offer to investors and to property owners.