Figuring out rent prices can be quite confusing at times. The good thing is that you can use a how much can I rent my house for calculator.
Table of Contents
- How Much Can I Rent My House For Using Mashvisor’s Calculator
- Easy 3-Step Guide to Using Mashvisor’s Rent Calculator
- How Much Rent You Should Charge: X Factors to Consider
One of the most common (and best) ways investors earn money in real estate is through rental properties. As rental property owners, investors typically enter real estate markets where rental properties do exceptionally well. These markets are divided into two categories: traditional and vacation rentals. And while there are vast differences between the two, rental property owners and industry insiders agree they are great investment vehicles.
As a rental property owner, one of the things you will need to know is how to price your unit for renting out. Rental markets have varying performance due to several factors. Which is why most investors find themselves asking, “how much can I rent my house for?”
In this article, we will discover the different factors you need to consider in coming up with reasonable rent prices. We will also go over Mashvisor’s rental calculator—or the how much can I rent my house for calculator—so you can set the right rent rates in as little time as possible.
How Much Can I Rent My House For Using Mashvisor’s Calculator
Rental properties make for a great passive income source. As long as you set the right prices, you get to collect rental payments regularly from tenants and guests. The regularity, of course, will depend on your rental strategy.
As mentioned earlier, a rental property owner has two choices. You may go with either a traditional or long-term rental or a vacation or short-term rental like the ones listed on Airbnb. Each rental strategy offers different benefits.
Traditional vs Vacation Rental Properties
Traditional rental properties allow landlords to collect rent from tenants monthly. This makes their income a lot more stable compared to vacation house owners. They also only need to deal with one tenant for a fixed period, unlike short-term rental owners who deal with several guests in a single season.
The downside is landlords might rent out to a bad tenant and get stuck with them for the remainder of their lease. A bad tenant might habitually miss payment deadlines a lot or might not take good care of the property. During cases like this, however, a landlord may take eviction action as long as he or she has sufficient evidence against the tenant.
On the other hand, vacation rental house owners have the potential to earn far more than landlords. This is especially true for vacation house owners who rent out their properties in popular vacation spots. They also get to expand their network with the number of guests that come to stay at their properties. In this line of business, connections matter. The more people you meet, the more connections you make.
Vacation rental owners, however, do not have the luxury of expecting regular income. Short-term rentals may potentially earn more but are bound by certain factors like seasonality and tourism.
As a rental property investor, you must choose which strategy works best for your situation. Do your own research about the market you’re considering before you make any final decisions. But regardless of which strategy you want to take, one of the most important questions you need to ask yourself is, “how much can I rent my house for?” Fortunately, there is a real estate website that has a how much can I rent my house for calculator that you can use: Mashvisor.
Learn More: Rental Strategy 101—A Beginner Investor’s Guide
What Is Mashvisor?
Mashvisor is a real estate website designed to help real estate investors find the most profitable house for sale in a market of their choice. Real estate investors and professionals have long used Mashvisor as one of their (not-so) secret weapons for investing success. Since its launch in 2014, it has helped countless investors find investment properties they can rent out and make money off of.
Mashvisor’s Unique Features
As a real estate investment tool, you can use Mashvisor to find houses that fit your investment criteria and goals. It has a huge database that covers almost the entire real estate market in the country. It uses data taken from highly reliable and reputable sources like the MLS, Zillow, Realtor.com, and Airbnb. This makes Mashvisor’s data one of the most accurate compared to other real estate websites out there.
Another advantage of Mashvisor over the competition is its user-friendly tools like the Property Finder, real estate heatmap, and investment property calculator. The last one, in particular, is quite helpful for those who are still asking themselves, “how much can I rent my house for?”
Mashvisor’s investment property calculator runs on sophisticated AI that makes it highly interactive and intuitive. You can use the data provided on the system when you perform your investment property analysis since it is highly accurate. However, you may also customize your calculations based on your own research. The AI used to operate the system will automatically adjust the necessary numbers based on the data you enter.
One of the best things about this site is it opens investment opportunities and makes out-of-state investing easier. You can now look for income properties for sale beyond your backyard and even cross-country if you want. The possibilities are endless.
Lastly, Mashvisor has three differently-priced tiers, with each tier guaranteeing you get more bang for your buck.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
How Mashvisor Calculates Rental Rates
When you want to know how much to rent to charge your tenants, what you really need to know is your rental cash flow. Rental cash flow is simply the difference between how much you charge for rent and how much you spend on the property’s upkeep.
If the number is negative, then you’re not charging enough to cover your upkeep costs and make a profit. You would want a positive cash flow to not just stay in operation but also have enough to take to the bank.
So when you’re computing rental income, there are only two main things to consider: rental property expenses and projected rental income. It’s important to know how much you will need to maintain the house and keep it in good condition to keep your vacancy rates low. It’s equally important to set reasonable rental rates to attract tenants and guests.
Related: Real Estate Investing 101: How to Calculate Rental Income
Rental Comps Is the Key
One of the simplest yet most effective ways Mashvisor helps rental property investors determine rent prices is by using rental comparables. Rental comps are properties that have nearly the same qualities and characteristics as a subject property within the same area.
These comparable properties give investors a good idea of:
- How much the fair market value is for a house
- What the cash on cash return is for a rental property in the area
- How much similar properties being rented out are earning
All real estate comps that Mashvisor uses are guaranteed to provide the most up-to-date and relevant data. As mentioned earlier, the data that Mashvisor acquires come from highly reputable real estate companies. This makes Mashvisor one of the most reliable real estate websites out there today. One proof of high consumer confidence is in its 4.6 out of 5-star rating from Trustpilot.
Mashvisor users can attest to the quality of data the website provides, including rental rate calculations using rental comps. Data from rental comps are gathered and stored in the system and then used for different types of computations. You can use this data to analyze investment properties or come up with rent estimates. You may even use it to come up with your own comprehensive market analysis (CMA) to see whether a house is profitable to rent out or not.
Easy 3-Step Guide to Using Mashvisor’s Rent Calculator
Using Mashvisor’s how much can I rent my house for calculator is fairly simple and easy.
Step 1: Enter Your Desired Location
On Mashvisor’s homepage, you will find a search field where you can enter your chosen location. It can be a state, city, neighborhood, or zip code. Type it on the search bar and click the Start Analyzing button.
It will then take you to the search results page, where you will find a map and a sidebar containing three tabs (Investment, Airbnb, and Traditional tabs).
Before you could find out how much you can rent your house for, you must first search for properties in your target location.
Step 2: Adjust the Heatmap Data Set Accordingly
The map also serves as a real estate heatmap that you can use to get a better understanding of the market. It is color-coded to represent areas that are performing well and those that aren’t based on the metric or dataset used. You may change the settings by clicking on the dropdown menu labeled Heat Map Dataset and choosing your preferred metric.
Since we are looking for a house that can generate a good income on rent, you may either choose Traditional Rental Income or Airbnb Rental income. It will depend on which rental strategy you choose.
For this example, we will go with a traditional rental property search in Tacoma WA.
The green regions represent neighborhoods that have the best rental prices for traditional rentals. The red areas are the ones that have the lowest rates. The yellows and oranges represent those in-between.
The pins represent the available income properties in the area. You can hover over a pin to see the basic details of the particular house. In this example, you can see the summary bar containing the following information:
- Listing Price
- Address
- Traditional and Airbnb Cash on Cash Return
- Traditional and Airbnb Cap Rate
- Traditional and Airbnb Rental Income
- Number of Bedrooms
- Number of Bathrooms
- Area in Square Feet
You may select several properties to compare to your subject property by clicking on the pin. It will give you a pop-up window containing additional information on the house represented by the pin. Just click on Compare in the upper right corner of the screen to start comparing properties side by side. You can scroll down the pop-up for more information and additional insights.
Step 3: Use the Investment Property Calculator
Once you already have a handful of comparable properties, get the details you need and use Mashvisor’s investment property calculator.
The great thing about this calculator is it answers your questions, “how much can I rent my house for?” by providing monthly rent estimates for each property you have selected. Even if you have more than one house on your list, you can still get highly accurate estimates because of the data quality provided by the platform.
In the same pop-up window, scroll down until you get to the Rental Strategy section. Under this section, you will find two sub-sections: Rental Strategy and Expenses. Both can be used to compute a reasonable rent price for your rental house.
Just enter the comparable income under Rental Strategy. Since the system is powered by sophisticated AI technology, it is highly intuitive. The system will adjust the numbers according to the input you make to come up with market-accurate estimates.
It won’t take long before you get the hang of it. Once you do, you’ll realize that setting rent prices isn’t as difficult as you thought it would be. You can easily get accurate rent estimates on any property in any market with Mashvisor.
How Much Rent You Should Charge: 6 Factors to Consider
While every real estate investor would want to make a good profit on a house for rent, an unreasonably priced rental property will turn off a lot of folks. This is something that you don’t want to happen. This is why knowing how to set the right rent price is crucial to your rental property business.
When coming up with reasonable rent prices, there are certain things you need to consider.
1. Location
One of the main factors that will determine your rent price will be your property’s location. Even if you have the best property in the universe, if it’s located on the wrong side of town, it won’t do you any good. To ensure better rent rates and, consequently, a better return on your investment, you need to find a property in a desirable neighborhood.
Here are the qualities you should look for in a neighborhood:
- Easy access to public amenities and transportation. If your property is located in an area that is easily accessible to almost everything, you are likely to attract tenants and guests. By the law of supply and demand, you can set higher yet reasonable rent prices, at least enough to give you something to take to the bank.
- Safety and security. Nobody wants to live in a neighborhood where the crime rate is high. Low-crime neighborhoods tend to have slightly higher rent prices.
- Growing job market. This is especially true if you plan to get into the long-term rental business. Folks are more likely to migrate to places where job opportunities are plentiful. If you want to collect higher rent payments every month, look for places where there is a growing job market.
- Growing or thriving economy. A thriving economy is always attractive to long-term renters and vacationers.
- Good educational system. If you want to attract families as your tenants, your rental property should be located somewhere that has a good educational system.
These things can help increase your rent price and increase your positive cash flow.
2. Number of Bedrooms and Bathrooms
The number of bedrooms and bathrooms a house has will also affect its potential income on rent. To get an idea of how much a house makes on rent monthly, you should look at properties that have the same number of bedrooms and bathrooms as yours.
3. Property Type
Single-family or multi-family home? Condo unit or apartment building? The type of property you get also plays a crucial role in determining how much you can collect on rent every month.
4. Property’s Date of Construction
Generally, newly constructed properties tend to get higher rental rates compared to older properties. But if a decades-old house is properly maintained and well-kept, it can still get a fairly higher rent price.
5. Occupancy and Vacancy Rates
Two things that will greatly affect your rental income are the occupancy and vacancy rates in the area. If you do your research well, you will find that rent prices in the neighborhood are directly related to the occupancy and vacancy rates.
For instance, a vacation rental property in an area with a high tourist volume tends to have higher occupancy rates regardless of the season. One such market is the Florida real estate market, which continues to perform exceptionally well all year round. Airbnb rent prices in such markets are a lot higher even if the daily rates aren’t as big because the Airbnb occupancy rate is enough to compensate for the lower rent price.
Inversely, units located in high-vacancy areas are likely to have lower incomes on rent. Since demand is low, investors tend to lower their rent prices just to attract tenants and guests. If they increase their rates, they might end up pushing potential tenants away. This is why performing due diligence is quite important in real estate investing.
6. Rental Comps
As already mentioned, rental comps are a great way of finding out what rent price is reasonable for your property. Before making a down payment on potential investment property, you need to compare it with other properties that are almost the same.
Related: The Best Rental Comps Website for 2022
Wrapping It Up
To end, setting the right rent price will help keep your rental house competitive in your location. The right rent prices will help bring in people and keep your property from having high vacancy rates. Regardless of whether it’s a traditional rental or a vacation house, you must learn how to find and set reasonable rent prices to keep your business going.
We hope that this article somehow answers your question, “how much can I rent my house for?” The best way to go about setting the right rental rates is by using Mashvisor’s version of the how much can I rent my house for calculator. It’s easy to use and gives you only the most relevant and up-to-date market data for greater accuracy. You can easily compute reasonable rent rates and get a more accurate ROI on rental property.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.