x

Client Login

How Much Rent Should I Charge My Tenants?

A regular income of rent is one of the joys of being a landlord. Not only does it help your day-to-day living but it’s also essential to the healthy maintenance of your portfolio. So how much rent should you charge your tenants to rent your property? The answer’s far from simple but with a bit of guidance you’ll be on the right track.

There’s a serious problem that comes with discussing rental costs. If you get this wrong, it can have a detrimental effect on your entire business. Also, it’s notoriously difficult to increase the rent when you’ve already set it. Opt for too little and you’re facing a potential loss. Charge too much and you may struggle to fill the property.

Research the Market

This is your best way to gauge an appropriate price. Look at properties of the same size in your surrounding area. If most rentals charge a similar amount then you’re going to have to be competitive.

When researching the market, consider where your property sits. If you can offer something significantly better than your competition, it’s worth placing your property at the upper end of the spectrum. Alternatively, if your house/flat is lacking in a few key areas then it might be worth dropping your price.

Work Out Your Rental Yield

So this isn’t the most attractive part of the landlord role though it’s an essential one. The income is the biggest draw of buy-to-lets. You need to work out your rental yield. In layman’s terms, this is the percentage of your purchase price which you take each year.

There’s a simple formula to work this out. Deduct all costs from the rent you receive. Then divide this into the property value (including any additional purchasing costs). You’re then left with the rental yield (make this a percentage). For example, if the annual rent is £10,000 and your property cost £200,000, you’re left with 0.05 which equates to 5%.

If you’re hunting for the next addition to your portfolio, it can be a headache to go through this equation over and over again. If you’re looking for a quick fix, head over to This is Money and give their Buy-To-Let Yield Calculator a try.

Before you settle on the rent you charge, you really ought to work out your rental yield.

Biggest Factors Affecting Rent

There are numerous key factors that dramatically affect the rent you can charge. Here are some of the most important points to think about:

  • Location – If you own a one bedroom flat in central London, you can charge more than you could for a four bedroom house in Manchester. Don’t consider the national average, think about the immediate area.
  • Is it furnished? – If you’re including furniture in the deal, you can charge more. Depending on the quality of the furniture, this difference can be huge.
  • PetsMany landlords don’t allow pets into their properties. If you choose to let to pet owners, it’s perfectly reasonable to charge more rent.
  • Tenants – If you’re aiming for a specific type of tenant, you can target them with the rent you charge. This effectively opens doors to some tenants by undercutting the competition or alternatively pricing some tenants out the market. Be cautious with this approach.
  • Amenities – What’s close-by? The facilities that surround your property play a big part in the price you can charge. Is it close to a school, has a great access to parking, is near a parade of shops, etc.?
  • Desirability – What’s the state of the local property market? Are rentals being snapped up as soon as they’re on offer or are they lingering for months?

Being a landlord can be very stressful. Don’t let inventories become another addition to this. Find out how No Letting Go’s inventory services can help take the pain away from the process.

Keep up to date: Free newsletter

You might also like

Should You Do a Tenant Reference Check?

Upload on November 8, 2018 by nolettinggo admin

Letting out your property can be a daunting thought for many. How can you ensure your next tenant will be a good tenant? Answer: with a tenant reference check. But, many landlords are still in the dark about what the […]

Read more

A Beginner’s Guide for HMO Landlords

Upload on October 19, 2018 by nolettinggo admin

HMO properties continue to be an appealing choice for landlords as they offer lots of advantages. For one, they are often more profitable than other types of rentals. However, these benefits come with added demands put in place to protect […]

Read more

Renting With Pets: A Landlord’s Guide

Upload on September 24, 2018 by nolettinggo admin

Historically, landlords and animals don’t have the best relationship. The fear of damage, infestations and related costs sometimes seem too much hassle than they’re worth. But, people love their pets! So, landlords who ban them run the risk of putting […]

Read more