As the owner of rental property, it is highly probable that one of the primary goals you have is ongoing income. But how can you determine the ideal amount to charge your tenant(s) for monthly rent?
The answer is, it can depend.
Just like any other product or service, coming up with the ideal price point can require you to factor in a number of key components. These can include supply and demand, as well as your competition in the market. In addition, your expenses, along with items that you may provide for the tenant – such as water and / or other utilities – should also be factored in.
Oftentimes, investment property owners will simply take the current value of the property and charge a percentage of that as the monthly rent. For example, if your property is currently worth $120,000, then a monthly rent price of $1,200 would be charged.
The length of the lease will also typically play a key role in the pricing of the rent. In this case, shorter term leases will usually garner a higher monthly rent charge as versus leases that are in the one- or two-year range (or longer).
You may also want to consider tacking on an added charge if the tenant has a pet (along with an additional up-front pet deposit that may be used for any damage and additional cleaning that may be required when the tenant moves out).
Setting rent prices – and then collecting the monthly check – can take some time, as can maintaining your investment properties. But the time that is spent doing so does not necessarily have to be yours.
By working with a professional property manager, you can free up much more of your time to focus on other things. If you own rentals in Orlando and / or the surrounding Central Florida area, give us a call for more details.