12 Rental Pricing Factors 2022: How to Price Your Rental Property

Perhaps you’re a participant in the Great Resignation and are looking to rent your current house as you relocate to a new area. Or maybe you recently decided to acquire a rental property. Regardless of how a home recently came into your possession, you’re wise to be putting it up for rent, as earning passive income from rising rental costs means you’ll have more money in your pocket to spend or reinvest.

But, with acquiring a new property comes the challenge of knowing how to price it. You’ll want to be earning enough to make a decent profit after your monthly expenses, but don’t want to price yourself out of the local real estate rental market. 

In this guide, we’ll give you all of the rental pricing factors to keep in mind for setting the perfect rent price for your rental property.

What Are Common Rental Pricing Factors?

While hyper-specific variables pertaining to the neighborhood and property at hand will most directly impact your property rent rate, here are the common factors that impact how much residents will pay for renting your property:  

1. The location

The famous real estate expression goes, “location, location, location,” for a reason! The state, county, township, neighborhood, and even street of your rental property must be considered when deciding on the appropriate rental price. Do some digging on the Internet to look for common trends in your neighborhood and surrounding area. To get you started, we’ve put together some local pricing guides for Seattle, Miami and the Bay Area. 

What do other local rentals look like? How does your property compare? If your property is pretty standard compared to others, you can anticipate charging around the average price for rent. If it’s much nicer, consider charging more than the average rent price.

2. Your property expenses

While you don’t want to price gouge your residents, you’re in the real estate business to make money. Consider your monthly mortgage payments, utilities expenses, HOA fees, and other set expenses to determine how much you’ll need to charge a month in rent to make your property a profitable expenditure. 

Pro Tip: Work with Belong for a look into average monthly utilities expenses and other localized rental data collected from years of managing properties in your neighborhood. 

3. Square footage of home (and # of bedrooms & bathrooms)

How much total space is there? How many bedrooms are there? Bathrooms? These numbers have a direct impact on the amount you can get a month for rent, so you’ll need to tally up these numbers and compare rent prices of local rentals with similar square footage and number of bedrooms and bathrooms. 

4. Age & condition of the property

Is the property you’re listing brand new construction or is it aged? The answer to these questions will have a major impact on demand and how much people are willing to pay. If it was built recently, be sure to compare rents with other new construction listings. If you notice other rentals appear older than yours, keep in mind that you can probably justify charging more. Working with an appraiser is your best bet for getting an accurate representation about the quality / age of your rental property. 

Pro Tip: Does your rental property look and feel old? Consider putting effort into a facelift and maintenance work now so that you can justify higher rent prices for years to come. Maintenance workers are full-time employees at Belong, meaning if you work with us as your property management team, you can get issues around your rental property addressed 24 / 7, 365. 

5. Local school districts

Parents obviously want what’s best for their children. That means they want to rent a home in an area known for having a high-quality school system. Put time into researching variables like local standardized test schools, classroom sizes, state rankings etc. via online platforms like Niche and Public School Review to determine how much of an impact local school districts will have on rental pricing. 

Read on for more details on How Your Property’s School District Affects Rental Prices.

6. Are appliances antiquated or modern? 

If you’re willing to splurge on modern appliances, you can leverage them as a justifiable reason to charge more for rent. Most people would much rather have a laundry room at home than have to take their dirty laundry to a laundromat. They’d also like to have a modern oven and stove top in their kitchen. By splurging on new appliances, it will drum up demand as a major selling point and garner you more in monthly rent prices.

Are you not interested in upgrading antiquated appliances? Keep in mind that you might not be able to yield the same rent prices as properties nearby with modern appliances. 

7. Who’s paying for the monthly utilities?

Are you covering the water and electric bills, or passing that cost onto the residents? Determining who’s paying for what will make it easier to dictate what the total cost for monthly rent will look like. 

Common utility costs include electric, water, gas, trash / recycling, Internet and heating / cooling. Decide which you'll be paying for out of pocket vs. passing on to the resident to pay. 

8. Are pets allowed? 

If a renter considers their pet a part of the family, they’re willing to pay more to secure a place to live for their fur baby. Give consideration to whether or not you’re willing to allow pets in your rental property, and be sure to charge them a monthly fee for having a cat, dog, or other animal,  as damage from pets can be a costly issue to fix for a landlord.

If you decide not to allow pets or the community in which you own doesn’t allow it, you won’t be able to charge as much for rent and will ostracize a large pool of potential residents (as 70% of American households report having at least one pet.)

Read More: 6 Paws-itively Compelling Reasons To Consider Renting To Pet Owners

9. Does your rental have a yard?

Besides the square footage of the interior of the house, Americans are obsessed with their lawns. That being said, open yard space for your residents to hangout, soak up the sun, and let their kids and dogs run around will definitely justify a higher rent rate. Will you also be covering lawn maintenance as a utility? Be sure to factor that into your rent price too!

10. Time of year

The summer months are a hot time to move (...pun intended,) with recent highschool and college grads venturing into new places to pursue an education or new career and parents of young children moving while public schools are not in session. 

If you’re able to list your rental in the summer when demand is up, you can lock-in a higher year lease than in slower times of year like the winter.

Why is Summer the Best Time to List a Property for Rent? Read on to find out. 

11. The current economy

Where is the world economy at? Is the real estate market booming or slowing down? Is the unemployment rate low in the neighborhood at hand? Considering the status of the economy at a macro and micro level will help in determining what people in your area can afford to pay in rent.

Pro Tip: As the summer months cool down and economic indicators suggest we could be entering a recession by 2023, you may want to consider getting your property listed sooner than later to lock in top rental prices. 

12. Other notable amenities

Does your property have a pool? Does the HOA offer a community clubhouse? Are there great restaurants and things to do in walking distance? These are all topics that are top of mind for renters looking for an ideal place to live, and they absolutely factor into how much you can justify charging for rent. While timing the market is easier said than done, pay attention to economic forecasts when deciding on the right amount to charge for rent. 

How can Belong assist in setting rental prices? 

When working with an expert to get your property rented, you have the benefit of years of experience and data on the neighborhood at hand to make educated decisions. Rather than spending your precious time researching factors like average local rental prices, nearby school districts, the condition of the property etc., let historical and quantifiable rental data set the tone for the appropriate rental price for your property.

Once a rental price is settled, Belong data and team members will work to get you the best residents possible for your property. Once they’re all settled in, another perk is guaranteed rent, meaning you’ll never have to worry about not receiving your passive income, even if a resident doesn’t pay on time. Onboard with Belong today to get your property rented soon and for a reasonable rate!