How Much Rent Should I Charge on a Home?

A well-priced rental will pay for itself and bring in additional income.

Base it on Your Home's Worth

Bankrate real estate adviser Steve McLinden recommends charging at least 1.1 percent of the sale value in rent each month for homes around $100,000. Ask slightly less for more expensive properties, to attract tenants from the limited pool that can afford higher rent. At $400,000, for instance, you may not find tenants if you price over .75 percent.

Go by What Others are Charging

Property Do notes the importance of researching the local market when setting a price. Study local newspaper or Internet listings to determine the going rates. Look at homes similar to yours in square footage, condition and neighborhood. Charge a competitive rate.

Bottom Line

Price for profit, but don't charge more than the market will bear. Beware, as both Property Do and McLinden warn, that renting at less than .8 percent leaves your bottom line vulnerable to fluctuations in interest rates, repair costs and vacancy periods.

References

• Bankrate: How much should you charge for home rental?
• Property Do: How Much Rent Should I Charge for a House / Home?

Resources

• Realtor.com: Real estate listings, homes for sale and rental property listings
• Good Mortgage: Should I buy an investment property or rental home?