How much should you charge for your rent? Pricing you rental too high can leave it sitting vacant, while pricing too low means you’re not getting the ROI that your property could provide. In this new video, you’ll learn how to evaluate rental comps, local rent laws, and tools like Rentometer to arrive at an accurate market rent for your property.
Every property manager or landlord should have an understanding of the local market where their properties are located. Knowing when the market shifts and what comparable properties are charing for rent can help you make the most of your portfolio.
In this video, Rentec Direct’s Brentnie and Kaycee break down how to use comps for accurate market pricing, why bedroom count alone doesn’t determine market rent, how one-time move-in discounts can help fill a vacancy without resetting your market rent, and what to know about recently scrutinized rent-pricing software and data laws. Join these rental experts to dive into all you need to know about how much to charge for rent.
How Much Rent Should You Charge? A Market Pricing Guide – Video Transcript
Brentnie:
Hi, it’s Brentnie and Kaycee again from Rentec Direct, and we’re going to answer some of your burning landlord questions. As you know, we love hopping into forums, and we also answer questions you send in to us, so if you have any questions, send them in and maybe they’ll be featured on a future video. Let’s get into it.
We had a question: “How can you accurately price your rental for the market? What’s the best way to find out what you should charge? I don’t want to waste money keeping the property vacant for too long, but I also don’t want to underestimate the market rent. Any tips?”
Kaycee:
Very, very common question. I have this question as a landlord myself. I always want to make sure I’m charging market rent and getting the best return on my investment, but you can’t price your rental too high, or you won’t get as many applicants. On the other side, you don’t want to underprice it either, you want to generate as much income as you reasonably can, both for cash flow and to put toward capital improvements down the road.
One of the best ways to land on the right number is to look at your comps. What advice do you have for finding good comps, Brentnie?
Brentnie:
I’ll add one caveat first: as you’re looking at comps, pay attention right away to your state or local regulations. You may be in a state or municipality with a rent cap or rent-increase cap, and that will affect what you can charge, regardless of what your comps tell you.
We actually have an article on the Rentec Direct blog about real estate comps, if you want a deeper dive, we’ll link that below. But generally, you want to look at comparable properties with similar amenities in your property’s location. Look at things like number of bedrooms, number of bathrooms, and whether it’s a single-family home or part of an apartment complex. The closer your comps resemble your property, the more accurate a picture you’ll get of what the market will actually support for your particular property.
Learn more: What Are Rental Comps?
Kaycee:
I also want to point out that more bedrooms doesn’t necessarily mean more rent. In our community, one-bedrooms can actually command a premium compared to a less desirable three-bedroom, and that’s just been my personal experience pricing different rentals in our market. So more bedrooms doesn’t automatically mean more rent, which is exactly why it matters that you’re not just looking at the average rent for your whole area. You want to know: what’s the average for a two-bedroom specifically? What’s the average for a one-bedroom? Does one neighborhood in your community command a premium over another? And then individual amenities can add a bit more on top of that.
Another good tip if you’re worried about vacancy: consider a one-time rent discount. If your property’s been listed for a week or two without much interest, try offering a one-time $50 or $100 discount just to get more eyes on the listing and increase showings. I like this approach because it only affects one month of rent, you get the applications, the attention, and the vacancy filled, but the remaining 11 months (or however long your lease term is) you’re still collecting full market rent. And if you ever raise the rent later, you’re raising it from the market rate, not from that discounted price, which matters a lot in places with strong rent control caps. You always want to start the lease at market rent and use a discount, rather than just lowering the rent outright.
Brentnie:
That’s a great tip. Another thing to factor into your comps: you want to look at everything you’d include in your rental listing, not just the standard bedrooms, bathrooms, and amenities, but also location, and specifically how easy it is to access things locally. A property right next to railroad tracks is going to be less desirable than one in a quieter neighborhood with strong walkability to shops and other local hotspots. When you’re reviewing comps, really dig into what makes your property shine, and try to itemize those advantages.
Kaycee:
That’s a good point: walkability score is exactly the phrase I’d use for that: how close you are to merchants, parks, restaurants, and stores, plus the overall desirability of the neighborhood. A two-bedroom in one location and a two-bedroom in another might not command the same market rent at all.
There are also some great services that can help with this research. We really like Rentometer, a great company that Rentec has integrated with. You just enter your property address, and it surfaces comparable rent prices in your region.
Learn more: New Feature | Confidently Price Your Rentals with Rentometer Integration
Brentnie:
One great thing about a service like Rentometer is that it’s built on publicly available data. You could go gather this information manually yourself, but they’re aggregating publicly available data, which lets you determine your comps and price accordingly much more quickly.
That brings up a special note: if you follow property management news, you may have seen the DOJ antitrust lawsuit and settlement regarding rent-pricing software. That settlement targeted the use of non-public data that had been aggregated, which isn’t legal or fair to the general public. If you’re in New York or California, those states have also recently enacted laws around multi-property data algorithms, designed to address concerns about collusive corporate pricing software.
As with any practice, it’s important to check with trusted legal counsel in your area before implementing something new. A tool like Rentometer should be fine, but it’s always worth confirming with an attorney, and remember, you can always do this research manually as well if you have any concerns.
Kaycee:
Yeah, always good advice to follow your state’s rules, and collusion was the core concern behind that original lawsuit. Using public data ensures all rental applicants have access to the same information that property managers and landlords use when pricing their rentals. Good advice, thanks for that reminder.
Final Thoughts:
Pricing a rental accurately comes down to knowing your local rent laws, finding accurate rental comps to create a fair and profitable rental price for every property in your portfolio. If you use property management software, publicly sourced data tools like Rentometer to can speed up the process.
Finally, remember that if you do hit a vacancy lull, the first step may not be to change your rental price. Offering a one-time rent discount at move-in can fill the unit faster without permanently resetting your market rent. As always, when in doubt about local pricing regulations, check with a trusted attorney before rolling out a new pricing strategy.
