How Much Can I Rent My House For in 2024?

Whether you want to rent out your house to bring in extra income or because you’re not quite ready to sell, one of the most important things a landlord can do is set an appropriate rental rate. With the right rental price, you can have enough cash flow to pay your mortgage and put extra income in your pocket.

Because setting a rental price is so important, we’re going to outline the best strategies for deciding how much to charge for rent in 2024.

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What to Consider Before Renting Out Your House

Deciding to rent out a house is a major decision. There are financial benefits to it, for sure, but it’s not something you want to enter into without a lot of thought. That’s why you should think about two things before you rent out your house:

1. The reason behind wanting to rent out your house

Thinking about your motivations and goals is a great starting point. For example, are you hoping your rental income will increase your monthly cash flow? This is both a long and short-term approach. It can increase cash flow if the rental market is good and you’re not quite ready to sell. Or, it can turn into a long-term income stream.

Or are you interested in asset appreciation? This is another long-term strategy that helps you reap the benefits of appreciation while having a renter subsidize the costs.

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2. Increased property expenses

Your rental price will have to cover obvious costs like your mortgage and insurance, but there may be some hidden costs you don’t fully understand, such as:

• Increased insurance costs: When you go from primary occupant to landlord, this changes the owner status on your insurance policy, and it may cost more to insure your home.
• Legal and administrative fees: You may encounter costs related to getting legal advice and drafting rental agreements. There’s also a financial and time investment in running credit histories and checking references. Some municipalities may even ask you to attend training sessions before listing your home. 
• Hiring a property manager: These professionals do a lot of the legwork for you and can save you time and energy; however, they come at a cost. Most rental property management companies charge 8% to 12% of the monthly rental fee.
• Cleaning, care, and maintenance: You may have to spend money painting, fixing things up, or cleaning to get your house ready for tenants. You’re also legally obligated to fix maintenance issues once your house is rented. You can charge tenants a security deposit to cover cleanup costs, but it won’t cover everything.
• Increased taxes: Most states and municipalities have tax laws that favor owners who live in their homes rather than renting it out. Do your due diligence to understand how local tax laws affect you so you fully understand the costs associated with renting out your house. 

How much can I rent my house for?

There are a few different strategies you can use to price your home’s rental value, and many landlords use a combination of them. For example, you can set the rent at a percentage of your home’s value and also consult local comps. 

Here are six proven strategies to help you set the rental price for your house:

Strategy #1: Use an online rental calculator

Online rental calculators aren’t entirely accurate, but they can give you a good baseline for setting rent. It’s best to look at multiple calculators to get a sense of the range. 

Zillow and Redfin have simple calculators that only ask for your address, then pull up data about the number of bedrooms, square footage, and other rental properties in the area. This is a very simple approach to calculating your rental price. However, there are others that allow you to account for factors like mortgage, property taxes, HOA fees, and more. 

If you’re interested in trying a rental property calculator, here are a couple to check out:

• Rentometer
• Rental Property Calculator

Remember, rental calculators give you a baseline

A calculator will point you in the right direction, but it probably won’t account for features that are unique to your home, your financial needs, and your long and short-term goals. They’re a good starting point.

Strategy #2: Base rent on your home’s value

Some real estate agents and rental companies suggest that you base rent on a percentage of your home’s value. A couple of years ago, landlords used the 2% rule, meaning rent could appropriately be set anywhere from 1% to 2% of the home’s value. However, with the changing real estate market, now experts suggest rent at 0.8% to 1.1%.

According to the Federal Reserve Bank of St. Louis, the median value of a home in the U.S. in 2021 was $374,900. Using the 0.8% to 1.1% rule, a home valued at $374,900 would rent for $2,999 to $4,123 a month. 

Is your home above or below the median U.S. value?

Most real estate agents suggest that if your home falls under the median U.S. home value, you should set the rental price closer to 1.1%. Homes worth more than the median value should use the 0.8% figure.

Supply and demand makes a difference

Another consideration when calculating the rent based on your home’s value is the basic law of supply and demand. Are there a lot of homes available to rent in your area or not? If the market is hot, you can expect to get more. But if supply is high, it would be difficult to charge much over 1%.

Strategy #3: Look at local comps

You’re probably familiar with the concept of looking at comps when buying a home. Comps, which is short for comparable sales, help your appraiser determine the market value of your home. You can use rental comps in the same way when setting the price of your rental.

How to set rent using local comps

You can use online rental platforms like Zillow, Trulia, and ForRent.com to find listings that are comparable to yours. Find homes in your zip code that have similar square footage, number of bedrooms, number of bathrooms, and location.

Examine each of those listings and think about how your house compares. Having new appliances or new flooring are upgrades that allow you to charge more. Renters are usually willing to pay more for a house that feels brand new.

Strategy #4: Speak to a real estate professional

Before you could ask the internet, “How much can I rent my house for?” and find calculators and online comps, real estate agents were the go-to resource. No surprise, consulting a real estate agent is still a solid way to set your rental price.

What a real estate agent brings to the table

A real estate agent or broker can be a great guide as you learn how to rent out a house. They have numerous resources, local experience, extensive data, understanding of local rent control laws, and relationships with other agents. A real estate agent will likely use a combination of the strategies in this article, like using your home’s value and looking at comps. 

If you have an agent you know and trust, ask them if they can help you price and list your rental. They can also recommend another reputable agent if rentals are out of their wheelhouse. Don’t be afraid to interview several agents until you know you’ve found one with the credentials and experience you need.

More to consider about using a real estate agent

The two main benefits of using a real estate agent are their wealth of knowledge and that they’re doing the majority of the work for you. 

On the flip side, you will have to pay for their services. If you only use them for pricing, listing, and helping you find a tenant, they may charge one month’s rent once a lease is signed. Using an agent to manage your property means you’ll generally pay the agent around 8% to 12% of the monthly rent.

Strategy #5: Use a rental property management company

A property management company can offer even more benefits than a real estate agent because they can do everything from help you set the price to dealing with late rent or helping with the eviction process.

What a property management company does

A property management company can turn being a landlord into a very passive source of income, and that’s because they can:

• Price your rental
• List your house for rent
• Advertise and show the property
• Run background checks and screenings
• Draw up lease agreements
• Collect rent
• Respond to maintenance and repair requests
• Handle late payments, tenant disputes, and evictions if necessary

Property managers also understand local rent control laws. They essentially act as a barrier between you and your tenants, but you can expect to pay 8% to 12% of the rental fee to your property manager.

Moving forward with a rental management company

You can search for property management companies in your area, and then start asking them how much to charge for rent, how they’ll choose tenants, how they’ll handle disputes, and so on. Make sure you know exactly what the process is like and how much it costs before you sign any documents.

Strategy #6: Set rent using your financial needs

This is the trickiest way to determine how much to rent your house for, but when done well, you can end up with competitive rental rates that fulfill your exact financial needs.

Determine your financial needs

Your financial needs are your monthly mortgage payments, taxes, insurance, and any other expenses related to your house. 

If you put a large down payment down on your house or locked in a low interest rate, you can reflect that in a really competitive monthly rental cost. When you’re trying to rent in a hot real estate market, you’ll get lots of interest in your house. This gives you lots of options for potential tenants, which is why you’ll want to thoroughly screen your applicants.

How to set rent based on your financial needs

Once you have a clear picture of your financial obligations, don’t cut yourself too short here. You want to make sure you’re able to set money aside for repairs and account for vacancies. 

How to Rent Out Your House in 2024

If you’ve searched “How much can I rent my house for?” there’s a good chance you want to know how to actually get it rented. One of the first steps is knowing how to set your home’s monthly rental price, but there’s more to it than just that.

Here’s a quick guide that walks you through how to rent out your house:

Step 1: Reassess your mortgage and insurance

Homeowners who want to rent out their house need to make sure their mortgage and insurance are both set up for a non-owner-occupant to live in the house. Call your lender and insurance company to make the changes before you proceed. Not taking this step can cost you!

Your insurance company can walk you through where you need to increase your coverage. You may have to take out a landlord policy, which costs between 15% to 20% more than homeowner’s insurance, but it can cover the following:

• Property damage: Helps pay for repairs and may also cover the landlord’s personal property.
• Liability: This legally protects the landlord from being held liable for any injuries the tenant sustains while on the property.
• Loss of rental income: This applies to periods when the house is unable to be rented due to repairs or if the property is damaged.

There are also additional riders for vandalism, building code coverage, and burglary. 

Step 2: Set your rental rate

There are several strategies you can use to set your rental rates, like using local comps, setting rent at 0.8% to 1.1% of your home’s value, or basing it on your financial obligations. Your monthly rental price should cover the costs of renting, like mortgage, taxes, insurance, maintenance, etc. 

If you decide to use a property manager, whether that’s a real estate agent or property management company, expect to pay them 8% to 12% of your monthly rent.

Step 3: Understand state and local tenant-landlord laws

Landlords must comply with local, state, and federal regulations that pertain to how and when a tenant can occupy your property. There are also certain landlord and tenant rights you’ll need to understand. 

Besides local and state regulations, you should read up on the Fair Housing Act and Fair Credit Reporting Act to understand the ways you can select, screen, and interact with tenants.

Step 4: Get your house rental ready

Before you can rent out your house, it needs to be clean and ready to move into, especially when rent demand is as high as it is right now. You’ll want your house clean and organized for listing photos. If there’s furniture in your photos, make sure it’s clear if your house comes furnished or not. 

You should also see if your municipality requires inspections or special permits before you move any further in renting out your house — this is all part of getting it rental-ready. 

Step 5: Find potential tenants

Now it’s time to start looking for renters, and choosing a tenant is one of the most important decisions a landlord will make. 

Here how you find and choose the best candidate:

• Set your renter criteria: You can set criteria like providing a rental history with references, having a clean criminal record, or making a gross monthly income 3x the monthly rental rate. 
• Create your listing: Your rental listing should be eye-catching, highlight amenities and differentiators, explain renter requirements, and include clear photos. You can list your rental on online platforms like Zillow, Rentals.com, Avail, or even Craigslist. Don’t forget to share your listing on social media, to local university housing boards, and even with a “For Rent” sign on your property.
• Ask important screening questions: You should ask potential candidates if they’ve ever been evicted, if they’re willing to authorize a background check, if they’ve ever been convicted of a crime, how many people will live in the rental, and if they own any pets.

Step 6: Collect a rental application

Once you have prospective tenants who have passed your pre-screening, you may want them to fill out a rental application and rental history report. You can find templates for these online or create your own. 

The application should ask for:

• Proof of income
• Authorization for tenant screening — including running a credit and background check
• Rental history report, including address, names, and numbers of landlords, so you can check their references.

Step 7: Have your tenant sign a lease

You’re getting close to renting out your house! Now that you’ve selected a tenant, you should be ready with a lease. Leases clearly define expectations and requirements for both landlords and tenants.

You can find sample lease agreements online, but generally, they should include the following provisions:

• Duration of tenancy
• Rent amount and how it’s paid
• Tenant maintenance requirements
• Pet policy
• Security deposit and other fees, and how they are to be paid
• When and how the landlord can enter the property
• Expectations about tenant behavior (like quiet hours or maintenance requests)
• Property restrictions (example: a no smoking policy)

When they sign the lease is when you’ll collect first and last month’s rent, the security deposit, and any other fees you need to move forward.

Importance of setting the right rental price

Setting the right rental price has serious benefits for landlords, and that last section alluded to some important points. To make sure you understand why an appropriate rental price is so important, let’s dig into a few points:

It helps you cover your mortgage and other costs

As a landlord, you have to cover a lot of different costs: mortgage, insurance, taxes, maintenance, and more. Determining a monthly rental price that helps you meet all of these costs will be key. You don’t want to break your savings or go into debt just to rent out your house.

You’re more likely to maximize your profits

The right rental price could mean that you profit from listing your home, not just covering the costs. Being a landlord might not be as lucrative initially as you had hoped, but any profit is good.

You’ll find a great tenant

The goal is to find a tenant who can make rent every month, and having comparable and competitive rental rates will help you find the right tenant. Pricing your listing too high means there won’t be much interest, and some believe that pricing too low attracts the wrong kind of renter.

How much can I rent my house for? The final word

Determining what to charge each month for rent is just one step in renting out your house. 

Remember, one of the simplest ways to set your rent is basing it on your home’s value, and the rule is 0.8% to 1.1% of your home’s value for rent. From there, you should check comparable rates in your area and think about your financial obligations.

Do your due diligence and thoroughly screen potential tenants, understand your costs, make changes to your insurance policy and mortgage, and get your tenant to sign an airtight lease. 

Remember, renting out your house turns your home into a business. You need to think about it critically and avoid emotional attachments.

 Disclosure: We earn a commission for this endorsement of Fundrise.