The rental housing business is very local and it takes time and effort to understand a local market and all the nuances that go with it. Many variables can impact the rent you can charge for your rental unit including: location, building structure, amenities, age of unit, market conditions, etc. The subjective and local nature of many of these variables make it difficult for anyone to tell you exactly the right rent for your rental unit.
However, having said all that, there are some things you can do to help you more confidently set your rents. Below are a few ideas to help you set rents for your rental property:
- Stay up to date on local economic and business activity in your market because economic activity is one of the key drivers of housing demand including rental housing.
- Work with local real estate professionals – property managers, brokers, agents, appraisers, and lenders. Local experts are especially good at identifying the drivers of housing supply and demand unique to your market – jobs, local ordinances, zoning, etc.
- Check local apartment listings using the local newspaper, apartment guides, CraigsList, and of course Rentometer (shameless plug!).
- Check your local apartment or rental housing association for research and other information they may provide about local rent levels – past, present, and future.
- Use “rent per square foot” whenever possible as a benchmark. This allows you to encapsulate into a single number all the subjective variables of rent and provides you a basis for comparison across different units, locations, amenities, etc.
The task of setting rents can be done more confidently with good current and historical data, as well as a thorough understanding of the local market and current market conditions.