If you’ve been asking yourself the same question, “how much rent can I get for my house?” stop right there—we’ll show you how to calculate it.
Table of Contents
- 5 Things to Consider Before Renting Out Your House
- How Much Rent Can I Get for My House: 3 Ways to Calculate
- How to Find Tenants or Guests?
- Preparing Your House for Rent: 3 Tips
The decision to devote yourself to real estate investing requires commitment and keen attention to detail. The same applies to those who wish to take things one step further and become actual landlords.
What seems to encourage investors to become landlords is the profit they can make.
According to the National Association of Realtors, A staggering 72.5% of landlords in the US are private landlords and investors who own one to three units. That amounts to roughly 14.1 million units in the rental market.
As far as rent goes, you need to decide on the rent price—and it needs to be fair.
It’s easier said than done, primarily because you need to consider several factors. You must come to a number that will enable you to make a profit off your rental property and, at the same time, ensure that your tenants can afford their stay.
Luckily, we’ve taken the time to look into such an important matter in more detail so that we can help you answer the critical question:
How much rent can I get for my house?
We’ll be doing the math for you, so scroll down.
5 Things to Consider Before Renting Out Your House
Future landlords must consider a few crucial factors before putting their house up for rent. We’ve highlighted the most important ones below:
1. Long-Term Strategy
Here’s an interesting fact:
Roughly 47% of all Americans hold on to their property because it has sentimental value.
It simply means that a significant percentage of landlords across the US housing market own only one rental property that they rent out.
After deciding that they want to stop renting out their property, they don’t sell it to another owner—they continue their life there. A lot of landlords rent out their property until they reach their retirement years.
And once they retire, they typically choose to move back into the said property. It is much easier than buying another property.
Although that’s one of the most common scenarios, it’s certainly not the only one. Landlords who own multiple properties may decide to sell one—and invest in another, more profitable property instead.
Either way, you must develop your long-term strategy regarding the property you’re currently renting out.
2. Hiring an Agent/Doing It by Yourself
Even though there are many private hands-on landlords in the US rental industry, it can be too much for some people to handle, and we get it. It’s time-consuming, and it requires you to be fully dedicated and committed to it.
For that very reason, many landlords are considering hiring a property manager to help them handle business around the property and ensure that the work will be done correctly.
Here are a couple of scenarios where you should consider such an option:
- You own multiple properties for rent.
- You don’t live near the property you’re renting.
- You don’t feel like you could successfully manage it yourself.
Quite frankly, the above are common scenarios that many landlords nowadays may encounter. It’s no surprise that they choose to hire a professional. After all, by hiring a property manager, the process of managing your property becomes easier.
Here is what the property will be responsible for:
- Collecting rent and property fees from tenants
- Paying for property expenses (taxes, insurance premiums, mortgages, and the like)
- Arranging contracts and filling vacant units
- Inspecting properties
- Dealing with potential disputes
As you can see, deciding to hire a property manager can take the load off your shoulders. It’s up to you—the investor—to decide whether it is the best course of action for your long-term plans, though.
3. Landlord Laws
The title “landlord” carries many different responsibilities. However, they are all based on one thing—respecting the law.
So, those new to the real estate business should definitely take the time to get more familiar with landlord-tenant law. The law was created solely for the purpose of regulating the rights, communication, and duties that fall on both parties—tenants and landlords.
As far as the landlords are concerned, the duties are divided into the following:
- Security deposit
- Disclosure of owner
- Delivering possession of the unit
- Maintenance
- Liability
The landlord should research and respect all the abovementioned points after the signing of the contract.
One more important thing to note:
The US housing market is vast, meaning there’s a high likelihood that landlord-tenant laws may differ across different states. It is why the landlord must inquire about any additional rules and regulations that might’ve recently come into effect.
Related: The Investor’s Guide to NYC Airbnb Rules
4. Applying for Mortgage Lender’s Permission
Suppose you’ve been living in the house for some time now, and you recently decided that you want to start renting it; you must know that the situation cannot change overnight.
If you purchased your current home through a mortgage and are still repaying it, you’ll need to consult with your lender and let them know what you plan to do with your property.
In other words:
You’ll need your mortgage lender’s permission to rent your property.
On the other hand, if you bought your property as an investment—with the sole intention to rent it out—you should inquire about the buy-to-let mortgage.
5. Expected Rental Income
The last—and perhaps the most crucial consideration—is the profit you can expect from renting out your house. Your primary goal for getting into it is to make a profit, after all.
Of course, it will only be possible with a good strategy and calculating the potential rental income in time.
Many landlords enter the rental business blindly, expecting high returns. However, it’s not always the case. For the rental business to kick off, you need to put the numbers down on paper and calculate your potential return. In other words, know what to expect.
How Much Rent Can I Get for My House: 3 Ways to Calculate
There’s more than one right answer to the question, “How much rent can I get for my house?” An experienced investor knows that there are numerous ways to calculate your rent.
As mentioned earlier, before you proceed with your plans, you’ll need to calculate how much you should charge for rent—and there’s more than one way to do that.
With that said, here are three ways in which you can calculate rent:
Method 1: According to Your Finances
One of the common methods of calculating rent is based on taking your finances into account.
In essence, you will need to figure out how much you need—and write down your mortgage payments, taxes, insurance, and expenses.
It’s a highly subjective way of calculating rent because you will figure it out based on your own monthly needs. In such a way, you’re putting a competitive price on your property, which may be outside of your tenants’ budget.
Don’t forget that the maintenance of your house can eat up to 20% of your profit—depending on the property’s size and state, of course.
Method 2: By Using Comps
When it comes to how to calculate your rent, another common solution is to use comps.
Unlike the previous method, which is based on your own expenses, using comps to calculate the rent for your house will be a more reliable way of setting a price that won’t stand out from the real estate market. Here, you should start by looking at other houses that are “comparable” to your own property in terms of size, age, features, and location.
It may take more time, but here’s some good news:
There are a number of ways for landlords to search comps in your area. You can do it online or through listings, for example.
You can use rental comps to calculate the rent for your house in a more reliable way.
Method 3: Mashvisor’s Rental Property Calculator
The most accurate method when it comes to calculating rent for your house would be to use one of our tools—Mashvisor’s Rental Property Calculator.
Also known as the investment property calculator, it’s an online tool aimed at helping real estate investors calculate the potential rent for their homes.
How does this one work?
It’s simple:
You just put in the property’s basic information—and the calculator does the math for you. It takes only a few minutes to give the landlord a price for their real estate property that meets their needs—and doesn’t deviate from the market’s average.
Why should real estate investors use the calculator?
Well, for starters, relying solely on traditional methods of compiling data and calculating rent is beyond time-consuming. It would take too much time, and there’s a risk that the calculated amount will not be correct.
With Mashvisor, the process can be done in minutes and is 100% accurate. Remember that the tool isn’t exclusively intended for beginners but also for professional investors who want fast and accurate results.
How to Find Tenants or Guests?
Now that you’re sure of your intention to rent out your property, it’s time to take care of another matter:
How to find guests and tenants? Where should you look?
There are many ways to handle this; here’s what we recommend.
Word of Mouth
If the community your property is located in is relatively small, and the word of you preparing your home for renting has gone out, you can use that to your advantage. In smaller communities, word of mouth can be a very effective way of finding future guests and long-term tenants.
For starters, they can be acquaintances or friends who may require accommodation for a few days. And, after a while, your friends and acquaintances who stayed at your property can spread the positive word about it—and keep the ball rolling.
Rental Websites
The “traditional” way of letting people know you’re renting your home is putting an ad on rental websites created solely for that purpose. Of course, you will be sharing this platform with fellow investors and landlords—but don’t see that as a downside.
Here’s the thing:
This way, you get to observe the alternatives or, in other words, “spy on the competition” lawfully. Luckily, there are many credible websites you can rely on in this department.
Related: The Best Rental Comps Website for 2022
Social Media
Perhaps the fastest way to spread the word and advertise your rental property is to share the “news” on social media. The good thing about it is that virtually everyone already uses social media; reaching your “target audience” won’t be a problem.
You can also use multiple platforms if you want a more comprehensive approach or are in a hurry to rent your property. For example, many landlords use Facebook Marketplace to advertise their properties for rent.
Preparing Your House for Rent: 3 Tips
Finally, you will need to take care of your house’s interior—and, quite possibly, exterior. So, a few “touch-ups” to prepare the property for renting and make any future tenants feel at home may be in order.
Here are some tips on handling this:
1. Inspect Your House
Doing a home inspection is arguably the single most essential step in preparing a home for rent. You can do it independently, but do note that you must take the time to go through every corner of the house.
Inspect everything—from rooms, ceilings, and floors to lights and pipes—that can turn out to be a problem for the future tenant. If you find something that needs to be repaired, take care of it immediately.
Trying to hide the issue or leaving it for the tenant to handle will only cause trouble.
2. Declutter
Everything you don’t need—or that won’t be important for your future tenants—should be put away. Why?
A cluttered space leaves a very bad impression.
Even worse, it makes it harder for future tenants to feel comfortable—and leaves them with a lack of space for their belongings.
So, if it is a home you used to live in, get rid of things you don’t need and anything that can break or get damaged by your tenants, for that matter.
The same rule applies to the furniture. Get rid of extra cupboards, beds, and chairs that may make it harder to move around.
3. Upgrade
If you’ve decided that renting out a house is something you’ll be doing for the long term, you should know when to upgrade your property. “Upgrading” is a very broad term, though, and can apply to many things.
For starters, it can include buying new appliances and gadgets but can also mean investing in quality furniture. Depending on the circumstances, it may even apply to the complete renovation of the property.
But ultimately, it’s something that needs to be done.
How Much Rent Can I Get for My House: Conclusion
We’ve managed to answer the question, “How much rent can I get for my house?” Now, as usual, let’s recap what we’ve learned so far.
By reading this article, we’ve reached the conclusion that calculating the rent for your home can be done in more than one way. But before you even put those numbers down on paper, there are a couple of things to consider:
Future landlords should think about their long-term strategy, local landlord laws, applying for permission, potential income, and whether they can do it on their own or if they should get help from a professional property manager.
As for calculating rent, again, it can be done in a couple of ways.
You can do so based on your own financial needs—or through researching comps. However, the most reliable method would be to use Mashvisor’s Rental Property Calculator.
After you decide to rent out your home, you’ll need to advertise it. It can be done through rental websites, social media—or even “word of mouth.” It depends on the feedback you get; that much should be obvious.
Finally, you’ll need to take care of a couple of touch-ups. So, inspect your house for possible issues, declutter, and know when to upgrade.
With Mashvisor’s help, real estate investing can be surprisingly straightforward.
Our Property Finder can help you search through hundreds of properties in the US and find the most suitable one within minutes. And nothing beats researching the US housing market from the comfort of your home; trust us on that.
What are you waiting for? Start your free 7-day trial today, followed by 15% off your annual subscription.
