How Much Rent Should I Charge for My Property?
Deciding on a price for something can be a delicate subject. This is especially true when it involves sums as large as those received for rental properties. The aim is to achieve as much as possible, but it’s crucial to stay in line with market averages.
Go too high, and it will be hard to let your property — especially in competitive markets. Set the price too low, however, and you could be missing out on maximising your earning potential.
It’s a balancing act, for sure.
If you’re about to list your property on the lettings market but aren’t sure about the amount of rent you should charge, worry not. In this article, we’ll look at how to set a rental price that you’re happy with and is competitive on the market.
Before deciding on your price, it’s worth getting a better understanding of the fundamentals of the UK lettings market. There are no set times for how long it takes to rent a property — it could be two hours or two months. However, if you’re looking for detailed statistics, research shows that it takes an average of 22 days to let your home.
The average monthly rent in the UK is £934 a month, which is up 1.6% from 2018. Unfortunately, using the average market rents for the entire UK isn’t a suitable method for setting your rental price. Markets vary in different areas: the average rent in London is £1,600, which is £825 more expensive than Manchester’s average of £775.
Knowing your market is the most vital aspect when it comes to figuring out the rental value of your home. Focus on your area rather than the entire UK.
Don’t be a greedy landlord
Understandably, you want to get all the money for your rental property. You’ve made an investment, and now it’s time to reap the rewards. But asking for too much rent is likely to leave you feeling frustrated.
There are factors, such as void periods, that landlords need to take into account before setting the rental price — market and property conditions will dictate the amount of rent you receive. Going straight to the highest figure without paying attention to the landscape of the market could see your property sitting empty for a prolonged amount of time.
Research the market
Market research is key. You don’t need to become an expert on property rental prices, but knowing the price of similar properties in your are will prove to be helpful. Head over to one of the major property portals and look for rentals like yours.
If you own a one-bedroom apartment in Swindon, search for one-bed flats in the southwest town. Look for properties similar in looks and size. You will soon get a rough idea of what landlords demand for rental homes that are like yours.
Condition of the property
The size and conditions of your property play an important role in setting the rental price. We don’t merely mean the number of bedrooms; two properties can have the same number of rooms, but one is much larger than the other. A one-bedroom flat that is 700 square foot will command more than a one bed that is 550 square foot.
The condition also comes into play: refurbished rentals with the latest appliances achieve considerably more than older properties. The same goes for the structure: a new-build fetches more than an older building.
There are online calculators where you can enter your property details and get the market value in the postcode where it’s located. These calculators can be helpful to give you a baseline — but they shouldn’t be used for a comprehensive comparison. They take in market specifics of the area, rather than individual properties, by using an algorithm for finding price averages.
There are also websites that collect data from every rental across the UK to show averages in different towns and postcodes. These are often more in-depth than a calculator, as they show averages for property size and type.
If you’re still unsure about the amount of rent you should charge for your property, one of our mashroomers will be happy to act as a guide. Using their market expertise, they can provide impartial advice on the type of figures you can expect to achieve for your rental property.
The decision is ultimately down to you. However, using a combination of market research and expert help will give you a clearer idea of the value of your rental property.