How to calculate market rent

By August 17, 2016Investing

Investors, and home owners considering turning their home into a rental, will want to know what rent they can expect a tenant to pay to live in their property. There are several steps you can take to find out how much your property can be rented for.

The first thing you should do is look at your local statistics to get an idea of what properties in Ku-ring-gai rent for. For houses, rent is usually around $900 a week, while for apartments it’s around $700 a week, SQM Research shows.

But these statistics should be used as a guideline. Every home is different, therefore it’s unlikely you’ll be able to successfully use an area’s average and find a suitable tenant. There is a broad range of homes up for rent in Ku-ring-gai, which means you need to do your due diligence to work out what market rent is for your particular property.

To do this, it’s worth searching our website to have a look at what’s available for rent. This will quickly show you that some houses attract thousands of dollars in rent each week, while others are comparatively affordable. You need to work out which category your property fits in.

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To do this, it’s worth initially filtering out any properties that aren’t fundamentally similar – for instance, if you have a four-bedroom house, you should only be looking at other four-bedroom houses if possible.  Then you should browse the listings for something as similarly located and closely presented as yours and then determine whether it’s superior or inferior. Your rent will be close to this property’s asking rent. It’s also worthwhile paying close attention to how many similar homes are on the market, as this will give you an indication as to whether you’ll need to drop the rent or if you’ll face lengthy vacancies.

There are things a listings portal can’t always tell you, for instance whether rents are being discounted or whether vacancies are starting to edge higher. Speak to our property managers for a free rental appraisal and to discuss the current rental market for the most up to date information.

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