Your home can be a smart asset if you consider converting it into a rental property, especially if you are relocating or not yet ready to sell it. Before you proceed with choosing a tenant that will help you pay off your mortgage, you will need to start by identifying how much you should charge for renting out your house.
There are factors that you need to take into account when figuring out the rate for renting out your home. The rule of thumb is to charge your tenant between 0.8% and 1.1% of your home’s actual value. You will also have to factor in the rental property’s location, amenities, current market value, and condition.
Questions To Ask When Figuring Out How Much Rent To Charge
1. What is my home’s current value in the market?
The first thing you will need to determine how much rent you should charge is the current worth of your home in the market. Keep in mind that the market value differs from the price you paid for your property.
There are websites you can visit that will help you estimate the actual cost of your home. You can also look for a home appraiser as they can give you an accurate assessment of your property based on several factors such as the property’s location, condition, and local home sale prices.
2. What are the average rents in my area?
Another way you can determine the rent price is by looking at the average rent in your area. There are real estate sites that will help you find the average rent prices.
All you have to do is to search by proximity or ZIP code, and you will get the pricing details, which you can compare.
It might also help if you drive around your neighborhood and look for rent signs. Inquire about their amenities, distinctive features, and rental prices.
3. Where is my property located?
The property location is another factor that impacts the rental price. If it is close to parks, beaches, and other tourist attractions, then the rate will be higher than properties will less accessibility.
Although the location is an important factor, you will need to make sure that you have reasonable charges. Avoid overpricing your rental property just because of the ideal location. If tenants cannot afford it, you will still struggle to find someone who is willing to commit to your terms.
4. What is the condition of my property?
Is your property newly renovated? Do you have amenities like a pool, 3-car garage, or walk-in closets? Does your property need an upgrade, but you cannot afford it at the moment?
Create a checklist for you to find out more about the condition of your rental property. If it requires renovation, you will need to adjust your price. You will know that the rate of your property is too high if it remains unrented for more than 60 days.
If you are in the market for a rental property that will give you a significant return on investment, Cape Coral Mortage can help by getting you approved for the appropriate mortgage to meet your needs.
Cape Coral Mortgage, Inc.
3512 Del Prado Blvd. S Ste106
Cape Coral, Fl. 33904
(239) 540 5555