page top
Home / Blog / Gateway HomeHub / Buying Next Home / How much rent should I charge for my investment property?

Back to HomeHub

How much rent should you charge?

Attention: open in a new window. Print

Things to consider when deciding how much rent to charge on an investment property

Tips for setting the rental price on your investment property. 

Your main goal is to get a reasonable return on your investment. But be wary of overpricing as you’ll find it difficult to attract and retain good tenants.

You may have heard of the ‘rental rule of thumb’ whereby you can expect $100 for every $100,000 that the property is worth. So, a $500,000 apartment should reasonably fetch $500 per week in rent. However, this blanket rule is far from perfect and there are many other factors you should be considering when setting an appropriate rental price.

Here are our 7 top tips for setting the rental price for your investment property:

  1. Check the local market
    What are the other properties in the suburb like? Download a free suburb report to find out. You can also check on real estate websites to research the average rental prices nearby.
  2. Be objective
    The number of bedrooms, location, parking, facilities, property condition and type of property all play a major role. These factors can all have an impact on your rental amount.
  3. Compare like for like
    There’s no point setting the price of your three-bedroom apartment against your friend’s 2-bedroom townhouse. Compare similar properties in similar areas – that’s what your prospective tenants will be doing.
  4. Know your financial situation
    It’s not the be-all-and-end-all of setting the price of rent, but you should have a firm understanding of what expenses your property will present to determine the viability of the investment.
  5. Ask a professional
    Consult a financial planner and property manager to establish an investment strategy that is profitable and realistic. On top of the recommendations of your real estate agent, a professional property manager can give you a realistic and independent price point.
  6. See what happens
    Take a chance – set the rent and see what happens. If you find it hasn’t rented after a couple of inspections, you can always lower the asking price.
  7. Never set and forget
    Staying up to date on the rental market is important to maximise your returns. Markets change, and values are never constant, so make sure you don’t miss out on opportunities by paying the lazy tax. Always review your rental prices and adjust accordingly.

 

Stay in the know

Subscribe to the Gateway HomeHub

Make a quick enquiry about home loans.