How to Determine Rent Price for Your Property 

The most reliable way for landlords to price a rental unit is by researching comparable rental prices and adjusting that number based on the specific features, amenities, and location of their unit. Landlords also need to consider the season, current market conditions, and local trends when determining how much rent to charge. 

In this guide, we’ll explain how to determine rent price for your property using rental comps and making personalized adjustments; explore legal considerations landlords need to keep in mind; and answer frequently asked questions about how to price a rental property. 

Once you’re ready to list a unit or adjust rent, ezLandlordForms is there to help with the forms you need, including a state-specific lease agreement, increase in rent notice, and online rental application. 

The Method for Determining the Rent Price for Your Rental 

When pricing your rental unit, the most important thing is finding data for recent rental listings in your area. Look at units as similar to yours as possible – based on bedrooms, bathrooms, square footage, and location. Use the data from recent rental comps to come up with a “going rental rate” for units similar to yours. 

Then, adjust that number up or down based on the unique features or amenities of your unit. Finally, adjust based on the season or any changes to real estate markets. 

Once you’ve done this analysis, check local and state laws to ensure you comply with any rent control or rent stabilization restrictions. Keep in mind that you need to be flexible when pricing a unit. If your listing doesn’t get activity or attract quality applicants, you might need to adjust the price or offer concessions. 

When pricing a rental unit, the key is finding the balance of setting a competitive rent price while also minimizing vacancy costs.

Step One: Start With Rental Comps

Comparable rental prices are the most important part of pricing a vacant unit. When looking at comps, focus on local data. Rental rates vary significantly from one location or neighborhood to the next. Look at rental rates as close to your property as possible. Review between 3 and 10 recent listings. 

The goal is to find comps as similar to your property as possible. This means a comparable: 

• Number of bedrooms
• Number of bathrooms
• Location
• Size or square footage
• Number of amenities
• Property type – i.e, apartment, single-family home, duplex, etc. 
• Time of listing – the last 3 months is ideal, but 3 to 6 months is still good

The more similar the comps, the more accurate the rental data will be. Here are some best practices for looking at comparable rental prices: 

• Only consider rental data in your area
• Only look at the same housing type – for example, don’t compare an apartment to a single-family home 
• Ensure the data is recent – anything older than a year has limited value 

Landlords can find rental comps by: 

1. Looking at online listing sites – for example, Zillow, Realtor.com, or Apartments.com. 
2. Using the Multiple Listing Service (MLS) if you have access through a real estate agent or other licensed professional. 
3. Reviewing data from their own rental portfolio.
4. Networking with real estate agents, property managers, or other local real estate investors. 

Step Two: Evaluate Property Factors That Impact the Price

Once you have a baseline rent price, adjust the price up or down based on the condition, features, and amenities of your rental property. Features that cause your rent price to adjust upwards include: 

• Updated kitchen and bathrooms (5-15%)
• A garage (5-10%)
• Parking (2-5%)
• Fenced yard (3-8%)
• Storage space (1-3%)
• Pet-friendly amenities – including a fenced yard or access to a dog park (3-10%)
• On-site amenities – for example, pool or gym (2-8%)
• In-unit laundry (5-10%)
• Smart home or energy-efficient features (1-5%)

Features that cause your rent price to shift down from comps include: 

• A busy street or less favorable location (3-10%)
• Older appliances (2-5%)
• Outdated bathrooms or kitchen (3-10%)
• Poor property condition (5-20%)

It’s worth noting that in most situations, fresh paint, minor cosmetic upgrades, fans, and updated fixtures generally don’t impact the price. 

Step Three: Consider Market and Timing Factors 

Next, property owners need to consider the timing of their listing. Rental prices are usually highest in the summer months, when they’re at peak demand, and lowest in the winter. 

In addition, the inventory available when you list can impact your price. If the vacancy rate is low (less than 5%), you can charge premium rent; when it’s moderate (5-8%), keep rent prices stable; and when vacancies are high (above 8%), be more conservative with pricing. 

Finally, be aware of any changes that could impact recent comps. For example, a new apartment building on the market, the start of a new school year in a desirable school district, or new jobs in the area. When looking for recent trends, pay attention to the number of days current listings have been on the market and any local changes that impact rental demand. 

With all of these factors in mind, you have the information you need to set a rent price. However, you should view that number as flexible. If you don’t see much activity after two to four weeks, review more data and consider adjusting. After a unit has been on the market for more than 30 days, it’s time to take action by reducing the price or offering a concession. 

Legal Considerations When Pricing Your Rental Unit 

Pricing a rental unit and filling vacancies can be a source of legal and regulatory exposure for property owners. Landlords need to be familiar with applicable laws to ensure their rental process is fair and legal. Some legal considerations to keep in mind when pricing a unit include: 

• Fair housing laws: Landlords cannot discriminate based on protected classes when selecting an applicant and filling a vacancy. To avoid state or federal fair housing law violations, use objective criteria when setting rent price and apply the same rental price and required fees to all applicants. 
• Rent control or rent stabilization: some cities and states have laws limiting the maximum amount of rent a landlord can charge, the frequency of rent increases, notice requirements for rent increases, and initial rent amounts. Landlords should review local laws to ensure compliance before listing a unit. 
• Price-fixing and antitrust violations: Landlords should price rental units independently based on a rental market analysis. Landlords cannot price units together or agree on minimum rents to inflate prices above a fair market rent. 
• Consumer protection laws: Rental listings need to contain accurate information that communicates the rental price and any required fees, such as required administration fees, security deposits, pet fees, or amenity fees. Inaccurate or misleading information can result in violations of consumer protection laws.  

Frequently Asked Questions About Pricing Your Rental Unit 

How to Set Rent for a Rental? 

To determine the rent price for your property, start with recent data about comparable rental prices in your area. Next, adjust that rent price up or down based on the unique features or your property. Finally, consider the current season and market conditions to determine whether to price at the top or the bottom of the range for comparable rental units. 

What Is the 1 Percent Rule? 

The 1 percent rule is a quick guideline used by real estate investors to estimate the rent price and cash flow of a unit. Under this rule, a property’s rent should be around 1% of its purchase price. For example, a $150,000 rental unit should generate $1,500 in monthly rent. This rule is not a pricing method, but instead is a quick way to do an initial analysis of an investment property. 

Where Do I Find Rental Comps? 

Landlords can find rental comps from online listing websites, MLS listings, property management companies, networking with local investing or apartment associations, and rent estimate tools. When looking at comps, landlords want to find properties as much like their unit as possible. Some of the most important factors to consider are location, property type, size, the number of bedrooms, the number of bathrooms, property condition, and amenities. 

How Often Should I Revisit the Rent Price of My Units? 

Landlords should review their rental prices when they fill a vacancy or renew a lease. As a general rule, review rental prices at least once a year to stay informed about local demand and market conditions. 

Key Takeaways for Landlords 

Landlords can price their rental units correctly by researching comparable rental prices and adjusting based on differences in location, features, and market conditions. That said, property owners need to be flexible with their rent pricing strategy – adjusting if a rental unit sits on the market for too long and reviewing it annually. 

The goal for real estate investors is to stay informed about market conditions and trends so they can price competitively while also minimizing vacancies.