Ever found yourself asking the question how much rent should I charge my tenants? Before you start marketing a property or renew an existing tenancy, it’s best to find out how much rent you should be charging your tenants in order to be a) competitive and b) get the most out of your investment property.
Working out how much rent should I charge?
When you are renting out a house or a flat, you want to be able to maximise your profits, while also being fair with prospective tenants. If you charge rents which are too high, you are likely to put people off, which can make it difficult to find tenants fast.
These are some basic points landlords should consider when trying to find the right rental price to charge tenants.
Location vs Competition vs Demand
The location of the property is one of the main considerations when it comes to working out how much rent should I charge. If the property is in the middle of a busy city like London, Manchester, Birmingham etc you are likely to be competing with a number of other landlords with vacant properties.
I was conducting a best price guide for one of our landlords recently and within a 1/4 mile radius of their postcode, there were over 200 similar properties available to rent on Rightmove!
Unfortunately, the demand for properties in this location did not outweigh supply… quite the opposite. So in these situations, I would recommend marketing the property just under market value to give you a competitive edge.
For out-of-town properties, you may have less competition however, if you over-price, you will still struggle to let it out. Find a balance between what is currently available, what has been let in the last 6 months and what is your appetite to get a quick let and reduce any void period.
Knowing your target audience
You should also think about the type of tenants you are looking for in your property. Are you happy letting a property to students or would you prefer professionals?
We recently took on a 6 bedroom property in a student area however, the landlord did not want students. Needless to say the property remained on the market for a while until the landlord agreed to open up the net and allow students… the property was let thereafter.
Size of property
The size of the property is another consideration and also any additional extras, such as a garden or garage. Again, looking at properties of a similar size will help give you a better idea of the best rates to charge.
Amenities / transport links
You should also consider the local amenities. If you are situated near popular attractions, you can definitely charge more for rent. Proximity to train stations or the tube if you are in London plays a vital role in pricing up your property.
Furnished / unfurnished
Furnished properties are generally more expensive than unfurnished although not in all cases. You may want to think about furnishing the property although the cost of maintaining the furnishings may be prohibitive. Here is a little further info on whether to let a property furnished or unfurnished
How much rent should I charge? A best price guide will show you
We've let over 8,000 properties across the UK and can advise you on the most competitive rental rates and the best time of year to let a property to ensure you manage to let out your property as quickly as possible.