How to work out how much rent to charge ?

[Habib123]

Ok this a uk specific question -possibly bordering oin mind blowing ignorance, but how do you work out how much rent to charge on a property ? is their formula to use or do you take into account a myriad of factors such as rental prices of similar sized properties in the surrounding areas ?

From a lenders point of view they want it set at a comfort level of 25-30% to cover the mortgage payments so do you take that as a general guide ?

any pointers appreciated

regards,

habib.

 

[Longterminvestor]

Simple answer is charge as high a rent as possible!

Joking aside, the only way to set a reasonable rent and ensure that you are not priced out of the local market is to see what others in the area are charging for similar properties. You will then need to ensure that the figures stack up because if the rental income, plus any additional money you can afford to put toward your mortgage payments, does not offer the relevant cover then that property may not be for you.

 

[realdeals]

It is vital that you remain competitive when setting rent on a btl property. You need to take a long term approach rather than racking in as much rent as possible in the short term. A long term tenant at a fair rent is better than charging over the odds and seeing a lot of tenants come and go - there are vacancy costs and advertising expenses to take into account when a tenant leaves.

 

[FWL]

This is all about knowing your market which is very important whether you are buying property, gold or anything else. If you dont do your research you might end up over pricing your rental figure or, just as bad, under selling yourself. There is being competitive and there is selling yourself short, very very different things.