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Setting the rent amount.

August 27, 2011

So how do you know where to set your rent? Understanding what rents are going for in your area is the first objective. I do this by calling on all rentals in my neighborhood and finding out where they set their rent. I also ask them about their deposit, pet deposits or fees, bedrooms, baths, updates they have made, etc.  I get full information on the comps in my area. You essentially are competing.

Another source I use is various websites. Zillow seems to be the most popular, but I question the accuracy of their data. I find finestexpert to be more accurate and is one of my favorite on-line comp sources. Other sources include newspaper ads, Craigslist, MLS, or asking a realtor or property manager.

I try and set my rent slightly below market. The idea being my property will not be the best one in the neighborhood, but it should be far from the worst. I don’t want to be the cheapest, but I don’t want to be the most expensive either. Some tenants will move from one home to another in the same neighborhood just to save $50 per month – even if the cost of moving would exceed this savings.

I have heard pundits say that you should price your rental slightly above market because tenants are opportunistic. They don’t think ahead and when they need a place to stay so they have to take what is available. You don’t want these tenants anyways. I have had the best luck by finding what my market will hold and pricing slightly below this.

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From → Landlord

2 Comments
  1. Chuck – I’ve heard that Rentometer (www.rentometer.com) is popular, but HotPads (www.hotpads.com) has a really cool drill-down using the Advanced search.

  2. Jeff,

    I have heard of rentometer. I will have to check out hotpads. Thanks. The one I really liked finestexpert.com just recently sent me a note they were shutting down. I really liked that one…

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