Factors to Consider When Determining How Much Rent to Charge

Calculating rent is one of the most important tasks on a landlord’s to-do list. If you own a property you’re planning on renting out, you need to charge your tenants a rental amount that’s fair enough to actually attract tenants, but not so low that you’re barely seeing any return on your investment.

There are many ways to simplify the process of determining how much you should charge. One of them is to use a rent estimate tool. By providing some basic information, you can get an estimate that will help you start determining whether you were planning on charging far too much or far too little.

You should also account for certain essential factors when calculating rent. They include the following:

The Basics

There are some obvious factors worth accounting for when you’re determining what constitutes fair rent. For instance, if you’re renting out a residential property, factors to consider include the size of the property, the number of bedrooms and bathrooms, and whether the property has a yard.

Other Rents in the Area

Every year, the U.S. Department of Housing and Urban Development releases a document providing information about the Fair Market Rent in 2,500 cities and counties throughout the nation. Check it to ensure you weren’t planning on charging much more than you should.

Local Income

Odds are good those you rent your space to will live in the area. Thus, you can’t charge more than they can afford. 

Research local incomes. The U.S. Census Bureau offers a tool that makes checking the median income of people living in a given city or town easy.

You don’t necessarily have to determine what you’ll charge based solely on the median income of citizens living near your property. For example, if you’re renting out a luxury property, you could charge a rental amount that only the top earners in a given area can afford to pay. You simply need to have a general sense of how much money the people living nearby have to spend.


The location of your property isn’t just one factor. It actually represents many factors that must be accounted for when calculating rent.

For example, although some tenants can’t afford not to, most tenants would prefer to avoid renting a property in an area that’s high in crime. Additionally, if you’re renting out to tenants who may be likely to have children, the quality of the schools in the area will also influence how much you can charge for rent.

It’s also important to account for the degree to which your property’s location provides access to employment opportunities, shopping, dining, cultural experiences, transportation, and more.

You may even need to consider weather patterns and local hazards when calculating rent. For example, two properties that are equal in terms of size, amenities, and other critical features may nevertheless be rented out for different sums if one of the properties is in an area prone to certain natural disasters.


Where people choose to live and work can and does change over time. A neighborhood that wasn’t particularly popular five years ago may now be hip and reinvigorated.

Don’t just consider the current popularity of a location when determining how much rent to charge. You must also account for whether trends indicate the area is likely to become more popular or less popular in the coming months and years.

Just don’t let this process overwhelm you. Yes, you do have to factor in many details when calculating rent, but there are plenty of resources to make the process easier. From rent estimate tools to consultants, you have numerous ways of simplifying this essential task.