How Much to Charge for Rent

Being a landlord ranks with bakers and prostitutes as the world's oldest profession. Even in these modern times, the age-old question still arises with every "For Rent" sign or ad that is posted: How much should I charge for rent? While every rental situation is unique, there are several principles that remain the same, regardless of the landlord, the tenant, and of course, the location, location, location.

Types

As far as residential real estate goes, there are several options to consider when determining the pricing structure of rent. Is the rental property part of the same house of the landlord, a detached structure on the same property or a separate house or apartment? Is the tenant going to share any services (laundry facilities, storage space, use of the yard, etc.) with the landlord or other tenants? Are necessary utilities (electricity, heat, cable television, etc.) included in the rent, or does the tenant pay those outside of the rent?

Time Frame

Generally, tenants who sign a lease agreement are apt to get a better monthly rate than those who are renting month-to-month. Having a lease is an asset, while the same can't be said for those renting on a short-term basis or without a lease.

Geography

How much rent should be charged depends on the part of the country the property is located, what other similar properties are renting for, and what perks are available (on-site laundry, swimming pool, proximity to a golf course, and so forth). Also, the law of supply and demand comes into play. Properties in "hot" areas are likely to have the market determine the rent, while those in less popular or rural areas are going to depend on some of the factors mentioned above.

Considerations

If the tenant brings some skills or expertise to the business relationship, then a reduction in rent can be considered. For example, if a landlord rents an apartment to a carpenter, then some of the rent can be paid for in services, rather than money. This is also helpful for yard work, or even just having an able-bodied adult in the area, particularly if the landlord is widowed and/or elderly.

Warning

As with every business (and personal) relationship, no agreement should be entered into without a thorough background and reference check. Simply contacting the references given by the prospective tenant isn't enough; an online check, a credit check and employment verification should also be conducted. If an applicant is offended by this process, chances are that she isn't the type of person you want living in your house or apartment.

Resources

• Landlord Association