When you are considering how to rent out houses or rooms one of the first considerations will be the rental price you’re going to charge. It is also the first criteria potential tenants will consider when they look at your ad so you need to get it right.
If you bought a property with renting it in mind then, so long as you did your homework correctly, you should already know what you’ll be able to charge. If you’re just starting to look at pricing, research is the key, don’t guess.
Finding out what you should be charging can be fairly easy depending on whether or not other people in your area are successfully renting similar houses or rooms. Go online and put yourself in the shoes of a person looking for your type of property and see what you find.
Assuming there are similar properties you need to decide how you want to attract people to yours instead. There are several ways you can do this:
- provide a more appealing advert
- get your advert seen by more people
- be cheaper than the competition
- offer a service or benefit that the other landlords are not
Don’t think that you always need to be the cheapest. If you decide to market your properties this way you might end up with the types of tenant that pay as little as possible and want everything for nothing.
Personally I prefer the other end of the market where people expect exceptional quality and service but are prepared to pay for it. It’s up to you which part of the market you want to go for.
No two properties are exactly the same so consider the benefits yours has over the competition and point them out in your adverts and during viewings. You could also consider not charging fees, including bills in the rent, making it easier for tenants to move out and offering free services such as broadband, sky or professional cleaners.
For example in my multiple occupancy properties I pay all the bills, including council tax, I provide professional cleaners for the communal areas and I do not tie any tenant to staying for the normal 6-month minimum period.
All they have to do is give a set period of notice (one or two months) and make sure their rent covers that period. This is highly unusual and to the tenant it’s a huge advantage over other landlords in the area. Because tenants are treated well and know they can go at any time they actually tend to stay longer than they would under normal circumstances and I have exceptional tenant retention.
If you are renting a house or a room which is unlike anything currently offered in your area (assuming you know there is a demand!) then pricing may not be so easy. However you should know what you need to achieve and you’ll also be able to get a good idea of price levels from surrounding areas so try a price and see what response you get.
I suggest starting low and raising it up if you get lots of responses. You can always change your prices once the property is rented although I suggest a policy of only changing prices between tenants not during a tenancy.
The big thing to remember when you’re starting to look at how to rent out houses is that you cannot get back rent lost from a property or room sitting empty so do your research!