Your ultimate goal in owning rental property is to make a profit. In fact you want to make as much money as you can with little addional effort on your part. By establishing your rent amount correctly, you will achieve the highest revenues you can get from the property.
While typically this is an analysis you would want to complete before you buy a rental property, you certainly should re-evaluate the amount of rent you charge periodically, and now is the best time. You may also decide to rent the house you have been living in for years, or the property you purchased was already rented. This is also a good time to determine what the correct amount of rent should be.
The longer you rent a property, the better you will be a determining the maximum amount of income you can get from your rental without having vacancies. However, some landlords determine rent amounts by guessing, asking tenants what they think is fair or accepting the amount that existing tenants are paying, amoung other methods. Even though they may increase the rent amount regularly over the years, the rent may still not be set at the optimum amount. While these methods might give you a starting point, they will not provide you with the maximum amount of revenue you can get from your property.
Believe it or not, the amount you charge for rent has a direct impact on the value of your property when you go to sell it. If potential investors review the rental history of your property and the rate of return is less than other properties, they will look elsewhere causing you to accept a lower amount. While your intention today may not be to sell your property you may have different circumstances 10 years from now.
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