To make a profit as a landlord, you need to rent your properties at a high enough rate to make a profit, but not so high that they stand vacant for more than brief periods. The right rate is the window between rents that are so low that you are losing money and rents that are so high that you scare away potential tenants. A comprehensive knowledge of the local real estate market will help you to determine what rents are appropriate for your particular property.
Explore the local rental market from the perspective of a tenant. Look at newspaper ads, real estate agency listings and online rental sites. Search for properties similar to the one you are renting, and note down the prices being asked. This is a quick and easy method of getting a ballpark figure.
Phone other landlords who are renting properties similar to yours. Ask them how long their properties have been available. The longer a property has been sitting vacant, the more likely it is that it is overpriced.
Factor in unique conditions when setting your rental rate. If your property is in a crime-ridden neighborhood or sitting next to an extremely loud highway, you may want to reduce the asking price somewhat. Conversely, if it is ideally situated for urban convenience, or if it offers a panoramic view, you can probably afford to increase the rent.
Consult official sources of information such as the United States Department of Housing and Urban Development (see Resources). This agency collects data about fair market rent in different parts of the country, and will give you an accurate idea of what your property should rent for.
Jagg Xaxx has been writing since 1983. His primary areas of writing include surrealism, Buddhist iconography and environmental issues. Xaxx worked as a cabinetmaker for 12 years, as well as building and renovating several houses. Xaxx holds a Doctor of Philosophy in art history from the University of Manchester in the U.K.