Today we are helping Minneapolis landlords figure out how much rent to charge for their rental properties. The price you attach to your property really depends on a few factors; condition, location and time of year. You can control condition. It’s logical that the cleaner the house is and the more updated it is for tenants, the more rent you can charge.
Sources for Comparables
Many landlords ask us about the best sources to use when establishing how much rent to charge. A lot of property owners will look at Craigslist or Zillow to see what other people are charging for similar properties. But they’re only seeing what they’re asking, not what the property actually rents for. Your best source is a professional property management company who specializes in single family homes.
Single Family Home Rental Analysis
We have been managing for over 30 years and we have rented out a huge inventory over that period of time. A rental analysis on a home is not like an apartment, where all the units are essentially the same. A three bedroom, two bathroom house in one location will have a different price in another location. It’s also important to consider square footage, updates and even time of the year. Certain months might mean you have to be more aggressive and lower the rent to attract someone. There’s not a lot of demand for rental property in the winter months.
Guideline for Rental Range
There is no rule of thumb to keep in mind when you’re pricing your home. However, there is a guideline that we have used over the years. You need to look at the price based on the value of the home. If you have an idea of your property’s value, you can figure it out. As an example, maybe your home is worth $200,000. Our formula is to take one percent of that value, which is $2,000, and then figure out a range of between 60 and 70 percent of that number. So in our example, 60 percent is $1,200 and 70 percent is $1,400. Therefore, your rental range is between $1,200 and $1,400 per month. If you’d like to learn more about how we can help you determine what to charge for your rental home, please contact us at RP Management.