How should landlords decide what rent to charge?
Start by comparing similar properties in the same area, looking at current tenant demand and considering the condition and features of your own property.
You should also think about how quickly you want the property to let.
The highest possible asking rent is not always the best financial outcome. A competitive rent that attracts a suitable tenant quickly can sometimes outperform a higher rent followed by a longer period with no tenant.
Compare similar rental properties nearby
A useful starting point is to look at comparable rental properties currently being advertised in your area.
Try to compare like with like rather than simply finding the highest advertised rent.
Look at what tenants appear to be choosing
Asking rents tell you what other landlords are hoping to achieve, but they do not necessarily tell you what tenants are willing to pay.
If several similar properties remain advertised for a long period, that may indicate the asking rents are too ambitious.
If comparable properties appear and disappear quickly, that may suggest stronger demand at that price level.
Consider the condition of your property
Two similar properties in the same road do not necessarily have the same rental value.
A recently decorated property with modern fittings, good flooring and strong presentation may be more attractive than a tired alternative at a similar price.
Prospective tenants often compare several listings side-by-side, so presentation matters.
Think about your property's strongest features
Features that make your property more attractive than comparable listings may support a stronger asking rent.
Be careful not to overprice the property
It can be tempting to start with an ambitious rent and reduce it later if there is little interest.
The risk is that the property receives fewer enquiries, remains available for longer and loses momentum during the strongest initial period of marketing.
A longer void period can quickly cost more than the additional monthly rent you were hoping to achieve.
Think about the cost of the void period
A void period is the time during which your rental property is empty and not producing rent.
When comparing possible asking rents, consider both the monthly rent and how quickly the property is likely to secure a suitable tenant.
A slightly lower rent combined with a shorter void period may produce a better overall result than holding out for a higher monthly figure while the property remains empty.
Review tenant demand in your area
Demand varies by location, property type and sometimes by time of year.
A one-bedroom flat near a station may attract a very different pool of tenants from a family house close to schools.
Consider your likely tenant
Different applicants value different property features.
A family may place greater value on schools, outdoor space and stability, while a professional tenant may focus more heavily on transport, broadband, parking or proximity to work.
Understanding your likely audience helps you judge which features genuinely support the rent you are asking for.
Reassess the rent if enquiries are low
Once your property is advertised, the response to the listing becomes another useful source of information.
If the property receives views but very few enquiries, the asking rent may be too high - although the photographs, description or presentation may also need improving.
Should you charge the highest rent possible?
Not necessarily.
The aim should be to achieve a rent that reflects the property's quality and the local market while still attracting suitable tenants within a sensible period.
How to improve the rent your property can achieve
If you want the property to compete more strongly, improvements to its presentation may help before you advertise.
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