In a theoretical sense, the value of anything is not based on what the seller wants – but what the market is willing to pay. In the world of rentals – this means that you do not necessarily set the rental amount – the market does. Your job is to discover what the market will allow for your house and attempt to get that amount, known as “Fair Market Rent.”
Luckily, discovering what the monthly rent will bear for your house is not difficult; the best way to determine how much your house will rent for is to simply do market research. In business, market research means to get out there and find out what others in your industry are charging; learning how much to charge for rent is no different. Your house will generally rent for about the same amount as other properties are renting for that are of similar location, size, and condition. To determine this and do your market research, there are many places you can look, such as:
- PadMapper.com & other online rent services
- Driving Around, looking for “For Rent” signs
- Calling Property Management Companies
- Asking other local landlords
- Local Newspaper
For each of these sources, call and speak to the landlord and ask questions (posing as a tenant.) This will help you determine how similar the target property is to your own. You will quickly be able to determine what the “going rate” is for your style house. For example, if you are trying to rent a three bedroom, two baths home in good condition, it will probably rent for about the same amount as other three bedrooms, two bath homes nearby.