How much rent should I charge for my home? 8 factors to consider
Many home owners are not sure how much their property/room should cost. Here is a list of 8 things to keep in mind when determining the cost of your property's rent.
The location of your home is a very significant factor when evaluating your property. The quality of the neighborhood in which your home is located is very important, since it determines things like what services are nearby (supermarkets, banks, pharmacies, hospitals, metro stations, etc.) and this directly affects the quality of life. Positioning is key since the distance between your home and places of interest (universities, city center, nightlife) determines the time and money the person spends in transportation.
2. Age and Condition
Newer homes typically have more value than older ones. However, the condition of the property is a factor that can alter this. For example, if an apartment was built in the year 2000 but its maintenance is poor, it will have less value than a 1980 apartment that is in perfect condition. In fact, in some cases, if the house is very old, but it has been well maintained with its original architecture, it may have even more value than an apartment built in the last 10 years. In most cases, the most modern and best maintained properties tend to be valued higher.
3. Size and Usable Space
The size of a home is directly related to its price. However, the usable space is a factor in the overall size that also greatly influences the price. Unusable space includes things such as attics, garages, or unfinished spaces. The usable space also depends on how the property is divided and distributed. For example, an 80 m2 apartment can have more value than a 90 m2 apartment if the first one has 2 bathrooms and the second only has 1. The size is very important, but distribution also affects the overall value and is something to keep in mind.
4. Type of Tenant and Duration
The price you put on your property also depends on the type of tenant you want to have. If you are looking only for visiting students, the price is different than if you were looking for a recent graduate who already works; the same applies for a traveler who will only be there a couple of weeks. Depending on the duration and considering the type of guest that the host is looking for, the price should vary, taking into account that not everyone must have the same budget to spend on stays.
5. Landlord Policies
A great determinant of the rental price is evaluating which services you are going to include. Things such as utilities (water, gas, electricity), cleaning, laundry, and meal regime. All these kinds of additional services will influence the rent collected and the attraction of your property to potential guests. Specific conditions such as allowing pets, couples, or smoking inside the apartment can also be reflected in the rental price.
6. Listing Quality
Making a good listing advertisment can also be very important to the rental price of your property. The more detailed the advertisement is, the clearer the value you reflect on your property for the potential guest. A good home with a bad listing can be perceived as worse than a lower quality home with an incredible listing. Make sure that the quality of your home is reflected in how you present it.
7. Local Market & Competitors
It is important not to evaluate your property only by comparing it to others similar in zone and characteristics. However, it is necessary to look at houses similar to yours in location and other aspects to see approximately what is the possible range to list yours. If the price differs significantly above other similar homes it is unlikely that it will attract potential tenants. There are always exceptions for spectacular homes, however, this applies in most cases.
8. Additional Amenities
Does your property have a garden, terrace, balcony, or pool? All these aspects and more can influence the price of your property. Any additional elements you can offer that are not found in every home add value to your listing. Consider how your guest would value it and think about whether it is influential enough to be included in the rental price.