As a property manager we get asked this question on a regular basis. Coming up with the correct asking price is not always easy and there are many things to consider when determining the rent for a property. You will need to consider what comparable properties are renting for and what is different about those properties compared to yours.
Looking at comparable properties in the area that are similar in type, size, location, similar condition and find out what they are renting for. This isn’t always as easy as it sounds because rental rates can vary widely depending on type of property and area. If a property is currently on the market you will want to find out how long its been on the market. Not all upgrades to a property will demand a higher rent but might set your property out from the rest by making it rent faster to better qualified tenants.
Setting rent to high or to low is a common mistake and can be detrimental to the success of your rental.
The thing to keep in mind is well qualified tenants will not pay over market rent for properties, they don't have to. Unqualified tenants will always be willing to pay over market rent and a lot of them have cash up front to move in right away. This is a mistake that happens all the time to unseasoned/careless property managers or the new property investor. When a property has been on the market for several months any tenant with money sounds great, until they stop paying and refuse to leave.
Settling for unqualified tenants only because they are willing to pay the higher rent will result in high turn over rates, evictions and extensive property damage.
A seasoned property manager will understand all of these attributes, their values and be able to come up with a good rental range you could expect to receive from any given property. The key to long term success with any rental property is setting rents at or slightly below market rental rates while providing well maintained properties, addressing tenant concerns and maintenance issues in a timely manner. This will insure happy tenants that pay on time, take care of your property and stay year after year.