i am sure this topic has been discussed to death but the problem is i couldn’t find how to search in forums…
anyway, i am having tough time trying to find the best way to set a rent…
i am getting $2600 in rent for a 3brm and i know it might be on the top end. my costs are $2000 after all deductions…so i have a cushion of $600…
so how does one calculate the right rent. i looked at the other comps and they charge less than what i do but my place is in much better condition.
also, when you gurus deduct expenses from your rental income, what deductions do you do…
as you might have noticed, i am newbie so please dont be harsh on me… i m just getting to know all this…
jessica.
Jessica,
Rents are set by the market and have nothing to do with your expenses or costs. The best way to find out what comparable units are renting for is to simply look in the newspaper. See what other renters in your area are charging and maybe even go look at a few of them.
Throughout the United States, operating expenses run 45% to 50% of the gross rents. That includes basically all the expenses except the mortgage payment (principal and interest only). The operating expenses include taxes, insurance, management (even if you do it yourself), maintenance (even if you do it yourself), vacancies, utilities (even if only during vacancies), advertising, legal fees, entity maintenance, evictions, damage done by tenants (in excess of the security deposit), lawsuits, capital expenses (not technically an operating expense), etc, etc, etc. Failing to account for all the operating expenses that occur over time is the number one reason that the vast majority of newbies fail in this business.
Good Luck,
Mike
I also found a great little tool online.
Rentometer.com
or
you can pull up the “for rent” section of your city on tenant.com to compare notes on for rent properties.
not sure how accurate it is, but its better than a sharp stick poked in your eye… 
All the best,
Jay
Jason S. Gray
Jessica,
$2600/month sounds like terrific rent! Be careful about raising the rent–a rent increase will push many tenants into looking for other housing. So you also need to know how many vacancies are in your area and price range. It takes a long time to recoup a month’s vacancy plus cleaning and advertising and your time. If they are good and they are paying, maybe just keep the status quo.
Furnishedowner
I found rentometer to be way off. My secret is I post a listing on craigslist with a price higher then what I expect to get and if I get 5-10 or more responses in the first 3 days then I know the price is right. If no responses come then I know its too high of a price and I post again next week at a slightly lower price. FYI: dont post fake ads or low ball ads.
I find that using CraigsList is efficient in getting a good understanding of Market Rent. Also speak with neighbors living in rentals near your property to find out how much they are paying per month.
I don’t have any idea of what your area’s market rent is but $2600.00 regardless of costs is on the borderline of a high rent price, in my opinion. Folks who rent are renters usually because they can’t afford the high cost prices that a mortgage accompanies. (others prefer flexibility and mobility that renting offers) I find that most renters are not interested in the high rents that accompanies a nice property, unless used as vacation homes, subletting, ect.
That’s why expensive cities like San Fran and San Diego (but absolutely can be done) are not the easiest vehicles used as investments as the property prices are very high regardless of condition.
That’s just my .02C, I’m not familiar with your specifics, $2600.00 may be a great price! Especially if your property offers something others near by do not.
Best of luck,
Stephanie
does anyone know if apt or a duplex is better?
Im trying to determine rents on a duplex but there arent any near by for me to compare.