Home Value
The amount to charge in rent is directly related to the home’s value. Landlords charge between 0.8 and 1.1 percent of a home’s value in monthly rent. This means that the monthly rent on a $100,000 house would range from $800 to $1000. On a $200,000 home, the rent might range from $1,600 to $2,000. Bank Rate states that a landlord shouldn’t charge less than 1.1 percent for a property valued at $100,000 or less. For homes worth up to $125,000, don’t charge less than 1 percent. For more expensive homes, the percentage may be slightly lower. A lower percentage is charged for higher cost homes because once rent gets too high, the pool of renters who can afford the monthly payment is too small. Keep in mind that charging less than 0.8 percent leaves little buffer for unexpected expenses, repairs or periods without a renter.
Expenses
A common misconception is that the homeowner’s mortgage payment should determine how much he charges each month in rent. Unfortunately for those whose mortgage payments are too high, renters do not care how much the owner pays each month. If lawn maintenance, pest control, garbage pick-up fees, home security or other costs are included in the rental contract, the landlord could possibly add these expenses into the amount he charges monthly. Rent is ultimately determined by how much a renter will pay for a property, not by the owner’s mortgage payment requirements.
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Comparable Properties
Home value cannot be the only factor considered, however. If a landlord follows the aforementioned formula, she might charge $2,000 a month for her $200,000 home. However, if comparable properties are renting for $1,500 a month, she may find it difficult to acquire a renter willing to pay her price. To find the prices of similar rental properties, check newspapers, local rental brochures and online. You might compare homes of similar age, location, number of bedrooms and bathrooms, and amenities. A home with an above-ground pool, customized high-end kitchen and soaking tub could rent for more than a comparably sized home without these amenities. Also, a four-bedroom home could feasibly rent for more than a same-age, three-bedroom home in the same neighborhood.
Return on Investment
One way to determine how much to charge in rent is to calculate the total expenses of running the property. These expenses include things like mortgage payments, property taxes and insurance. Using the return on investment principle, a landlord might determine he wants to make a profit of 10 percent. To determine how much rent he’ll charge, he’ll add his mortgage, operating expenses and desired return. Using this principle, he will be able to make a profit on his rental property and more than cover his expenses.
400 125 per week...you and two others...1200 to rent the entire house..sounds about right..
I live in VA and it would be 8 or 9 hundred here. Don't know MN.
I live in a rural area in Anoka, MN and I am looking to rent out 1 or 2 rooms. One room is in the basement, it would have access to a private bathroom with a stand up shower. The renter would have access to the basement, washer/dryer and share the kitchen, garage spot. The second room, would be on the main floor and they would have a shared bathroom with the same accesses as the above.
How much would you regularly charge for this? I was thinking $500-600 however I am not sure this is to much for this area. I've seen more for less, and less for more. Thanks in advanced!
