The Golden Rules of Setting Your Monthly Rent
If you’re a first-time landlord about to rent out a property, or an established landlord looking to purchase a new investment, one of the main questions you’ll have is how much rent you can charge per month.
Of course, you can (and should) take the advice of your agent, but it’s also worth understanding exactly what factors impact the amount of rent you can sensibly charge.
In this quick read, we explore the factors you need to consider before pricing your rental property.
Compare
The first thing to look for is properties that are similar to yours. What rents are they achieving? It’s important to look at the number of bedrooms and bathrooms, accessibility and outside space to make a proper comparison. Once you’ve got a basic idea, you can think about why you might be able to charge more (or less).
What’s your USP?
Think about what makes your property different. Is there a driveway or gated parking? How big is the garden? Is it newly renovated? Do you have a functional space such as a home office or gym area? If it’s a flat, is there a lift or balcony? Picking out the features that add value to a property will often reflect the amount of rent you can charge.
Surrounding area
An important factor for most tenants is how close a property is to amenities such as shops, supermarkets, transport connections and schools. You may be able to charge a higher monthly rent if a property is well-connected and close to places people may need daily.
Monthly costs
Keep your costs in mind. How much are your monthly expenses? There’s your mortgage, service charge and/or ground rent (for flats), insurance and potential maintenance costs to consider.
Most landlords take a long-term approach to investing. If your rent covers your costs and you still make a small profit, then you’ve got yourself a good investment.
Don’t get greedy – charging over and above the average local rental prices won’t get you very far, and you may be stuck with a vacant property.
Agents’ expertise
It’s always a good idea to take the advice of your letting agent. Not only do they know the area, but they know what tenants want, expect and – more importantly – what they’d be willing to pay for a property like yours.
There are multiple factors that impact the amount of rent you can charge. Speak to our team at Millbanks if you’ve got a rental property and need new tenants.