market, you’ll have to ensure your rental rate is on par with other properties in the area to stay competitive. You might want to consider going back to Step 1 and make your home more appealing to attract more applicants.
The Goldilocks Rental Rate
The key to setting the appropriate monthly rental rate is to use what I call the “Goldilocks Rental Rate,” meaning your rate is neither too high, nor too low. Specifically, you don’t want the rate to be overpriced so that your home doesn’t rent, leaving you to pay the mortgage and to miss out on months of rental income. You also don’t want to set the rate too low—sure, you might find more applicants and rent your home quickly, but you’ll either lose money in the process, or not make the profit you’d hoped for in this business. So find that Goldilocks Rental Rate! Be extra careful not to overprice your property. Many newbie rental property owners assume that if they charge just a bit more money, it will benefit them over the long term, creating that extra profit. But this line of thinking could actually cost you! Here’s how: Let’s imagine that you rent your house out within one week for $1,900 a month. Over the next year, you can expect to bring in $22,361.54. But if you decide to up the price slightly to $2,000, and it takes you six weeks instead of one week to find a suitable tenant, you’ll end up losing money—you’ll bring in only $21,230.77 for that year.
Post on Websites
Putting your property on the market means posting advertisements for your home on all applicable and relevant websites. The most popular rental property sites are a must, and these include Realtor.com, Zillow, Trulia, and apartments.com.
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