How much can I rent my property for?

Determining the optimal rent for your property is a crucial step in maximizing your real estate investment. In this article, we’ll delve into the factors that influence rental prices, strategies for accurately assessing your property’s rental value, and tips for maximizing rental income over time. So let’s dive right in.

What factors should I consider when determining my rent?

Property characteristics such as location, size, and amenities

When assessing rent for your property, its location should be your number one consideration. Properties in prime locations with good access to amenities, bars, restaurants, shopping centers, schools, and transportation hubs generally command higher rental rates as they tend to be more desirable to potential renters. The size of your property and the amenities it offers also play a significant role. Overall, larger properties with more bedrooms, bathrooms and facilities tend to naturally fetch higher rents.

Market trends and demand in your area

Understanding the market trends and demand in your area is another key factor affecting your property’s rent potential. Factors such as the strength of your local job market, population growth, and local development projects can all impact the demand for rental properties in your specific area. So be aware of these trends and adjust your rent estimate accordingly.

How can I calculate the optimal rent for my property?

There are usually two approaches to assessing rent for your property: doing it manually or automatically. We’ll describe them both in detail below but the key takeaway is that the manual approach gets you a more detailed and relevant estimate but it takes more time. On the other end, online rent calculators are very quick to use and provide an immediate answer but the methodology they follow and the properties they select can sometimes be questionable.

So which approach should you follow? Well, it depends on the situation. I personally use the automatic approach when screening my local market and reviewing multiple properties at a time. When a property appears to have potential, I then use the manual approach to confirm that my rent estimate is accurate. When doing so, don’t hesitate to use some of the comparable properties already identified by the online tools, they provide a good starting point.

Manual Approach : researching comparable properties in your area

How to estimate your property's rent manually

With this approach, you’ll determine your property’s rent by researching comparable properties in your area yourself. This process is fairly simple but time consuming if you want to do it right. Here are the steps:

Start by identifying the key characteristics of your rental property, including location, size (square footage), number of bedrooms and bathrooms, amenities (e.g., parking, laundry, outdoor space), and any other features that may impact its value.

Then go on real estate platforms such as Zillow, Trulia, Rent.com, Apartments.com, or Realtor.com and enter your property’s criteria to search for similar rental listings in your area.

Don’t forget to focus your search on neighborhoods or areas that are similar to yours in terms of amenities, school districts, proximity to public transportation, shopping centers, and other factors that may affect rental prices. You want to make sure you’re comparing apples to apples.

Review the details of each rental listing that match your property’s characteristics. Pay attention to factors such as any amenities and special features mentioned in the listing descriptions that may impact the rent, either positively or negatively.

Don’t forget to also take into account any additional qualitative factors that may influence rental prices, such as the condition of the property, recent renovations or upgrades, and whether utilities are included in the rent. Those things are often overlooked by online rent calculators so don’t make the same mistake!

If there are significant differences between your property and the comparable properties you’ve identified (e.g., newer appliances, better views, larger outdoor space) but you still want to use them in your assessment, make adjustments to account for these differences when estimating the equivalent rent for your property.

Try to identify at least 3-5 rental properties (more is better) that are similar to yours. Write down the rent of each property in a spreadsheet then calculate the average. That’s it, now you know how much rent you could expect to charge for your rental.

Use our Comparative Market Analysis template to review properties and compare them with your rental

Automatic Approach: using online rental price estimators

Another, much quicker, way to estimate your rent is by using online rent calculators. The approach these tools follow is usually the same as the one I described previously but the analysis is run directly and automatically by these websites. The downside to that approach is that the comps selection might not always be perfect, which could skew your estimate.

Here are a few of the rent estimators that I’ve been using to estimate the rent of my properties:

RentCast
Front end of RentCast, a tool to look up rent estimates, comps and market trends for any property in the U.S.RentCast enables you to look up rent prices and comps for any property in the US, as well as track your rental portfolio with real-time alerts and market updates. In its free version, you can enter your property address, the property type, # of bedrooms and bathrooms as well as the square footage and RentCast will, not only, automatically calculate an estimated monthly rent but it will also provide a range of possible outcomes as well as list of 5 comparable properties used for the analysis.

The Pro version gives you access to more comparable settings for your search as well as additional comparable properties (up to 20) for the analysis.

Get 20% off when using the promo code BIGDEAL to sign up for a Pro Account

Rentometer

Rentometer allows you to instantly check rent prices in your local market

Similar to RentCast, Rentometer estimates your property’s rent by running comps for you. Simply enter the address, an estimate of your rent, the number of bedrooms and bathrooms and the tool will generate the expected average rent, as well as the median, 25th percentile and 75th percentile.

Zillow Estimate

Zillow Estimate is an only rent estimating tool from the well-known Zillow real estate website

Difficult to talk about real estate investing without mentioning Zillow. The website offers a rent estimating tool that will help you estimate how much you should charge for rent. It offers less customization than the two tools mentioned previously but still offers valuable insights. Simply enter your address and unit number, and Zillow will generate your Rent Zestimate as well as the applicable range of possibilities. The tool will also lists the properties it took into account to run this analysis so it’s easy to see if the results are relevant to your situation.

RedFin Estimate

The Redfin Rental Estimate is an estimate of the fair market rental value of an individual home.

RedFin offers a similar service as Zillow that allows to estimate your rent by simply entering your address. From personal experience, it seems like this tool offers less relevant results than other tools described above. I still recommend giving it a try but don’t rely solely on this tool.

Rent.Com

Discover the true potential of your property with our rental pricing tool. Using real time comparisons of similar nearby rental properties, the tool helps you set the ideal rental price that ensures maximum returns and tenant satisfaction.

Similar to Redfin and other online rent calculators, Rent.com offers a rent estimating tool where you can enter your street address and the size of your property (based on the number of bedrooms) to get an estimated rent. This tool will also nearby house rentals and show you how your rental compares with other houses in the neighborhood.

Awning Rent Estimator

Awning’s Rent Estimator estimates how much rent you could earn for your house or any property nationwide

Last rent estimating tool on the list comes from Awning. Unlike some others, this tool only takes into account your address to run the analysis. It does take into account the number of bedrooms and bathrooms and it’s able to automatically identify this information from public records.

Putting Them To The Test With An Example

Now that we’ve identified a few online tools, let’s see how they compare when looking at a particular property. For this case study, I’m using a random property found on the MLS that is currently listed for sale in the city of Stamford in Connecticut:

Example of a property available for sale in Stamford, CT

After running the address in the various estimating tools, we get the following results:

ToolAverage rentRent Range
RentCast$2,080$1,830 – $2,340
Rentometer$2,134$1,772 – $2,497
Zillow Estimate$1,949$1,650 – $2,179
Rent.Com$2,144$1,600 – $3,790
Awning$1,937$1,800 – $2,299
Total Average$2,049$1,730 – $2,329

In this example, all tools yield similar results, with an average rent of $2,049, which makes us pretty confident in the accuracy of this estimate. The proposed ranges tend to vary more, especially the upper range of Rent.com so I’ve excluded it from my range average. More generally, a range of rent estimates is also a very valuable piece of information because it enables you to run financial projections in a downside scenario.

Estimate how much cash flow your property can generate with our free Rental Property Analysis Spreadsheet

How can I maximize rent from my property?

Once you’ve set your rent and have found your first tenant, there are a few things that you’ll have to keep doing on an ongoing basis as a landlord if you wish to maximize your rental income over time:

Stay up to date about your local market

The best way to maximize rental income is to regularly conduct thorough research on rental rates in your area. By periodically comparing your property to similar ones, you can make sure that your rent remains optimal yet competitive. Incrementally raise rent each year to keep up with inflation and market demand, but be mindful not to overprice your property and drive away potential tenants. Increasing tenant turnover to maximize rent is often a losing strategy over the long run.

Offer more amenities

Consider adding desirable amenities to attract tenants and justify higher rent. This could include in-unit laundry, parking spaces, furnished outdoor spaces like a patio or balcony, or more modern appliances.

Renovations and Maintenance

Keep your property well-maintained and consider making upgrades or renovations that can increase its value and push higher rent. Focus on improvements that offer a good return on investment, such as kitchen and bathroom upgrades or energy-efficient features.

Screen tenants carefully

There’s no point estimating your rent accurately if there’s nobody to pay for it. So avoid vacancies and potential income loss by screening tenants carefully. Look for tenants with stable income, good credit history, and positive rental references. A reliable tenant is more likely to pay rent on time and take care of your property, reducing turnover and vacancy costs.

Be a good landlord

Maintain good relationships with your tenants by providing excellent customer service and promptly addressing any maintenance issues or concerns. Happy tenants will usually stay longer and may even recommend your property to others, further reducing vacancy rates and turnover costs.

Consider Short-Term Rentals

Last but not least, depending on your location and property type, exploring short-term rental options like Airbnb or VRBO could potentially help you generate much higher rental income, especially in tourist or high-demand areas. However, be sure to familiarize yourself with local regulations and consider the additional time and effort required for managing short-term rentals as they tend to be much more hands-on.

Make money on Airbnb with your rental property using our Airbnb Calculator spreadsheet