How Do I Choose a Rental Price?
How to choose the monthly price is one of the biggest details to work out for how to rent a house. Where to find the right price to charge your renters per month? The short answer to choosing the correct rental price for your property is to set a price that maximizes your cash flow. While this might seem like encouragement to select the highest monthly price that a tenant might pay for your house, there is an even more profitable strategy. Choose a rental price that generates rental income in your desired time frame while also leaving room for modest rental increases that don’t chase away your existing Tenant.
Rental Property Income
The biggest part of setting your rental property price per month is to make sure that you have the following things covered:
- Does your rent cover your mortgage? If this is a rental property because you can’t sell, then make sure that you have your mortgage, tax and insurance needs covered. Whatever that price ends up being, try to add a tiny bit to it each month to set aside for repairs.
- Have your real estate agent pull the rental prices for other comparable rental properties in your area. If you want to get $1,500 for a 3 bedroom 2 bath home, but there are many 4 bedroom 2 bath places around you on the market for $1,400 a month, realize you are going to have a hard time finding tenants. But if you set your rental price at $1,200 a month, then you should have your pick of renters applying!
- Create a budget for a savings account for your rental repairs. You don’t want to use your own money for repairs. After having mortgage, taxes and insurance covered, at around $100 a month for repairs. After a year of renting, that gives you $1,200, which is plenty to repair a roof leak, a broken hot water heater, or a leaky sink.
How To Rent A House
After you have your mortgage, taxes and insurance covered, plus a small additional amount for future repair needs, and compared your home to other homes for rent in your area, you should have a perfect idea of what amount is fair, reasonable, and will generate you some income. To learn more, contact one of our Paramount Realty Solutions Rental Property Managers for the Raleigh NC area.
Choosing a Rental Price
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