What Should the Minimum Rent Be for Cash Flow?

Owning an income property can be an incredibly lucrative venture that offers numerous benefits. Although there are many factors that contribute to owning a successful rental property, of the of the most important is knowing what to charge for rent.

Calculating rent can be difficult. If you charge too much you could be pushing away potential tenants. Charging too little could mean that you are leaving valuable profits on the table. Although the “1% Rule of Thumb” was the standard for calculating rent (charging roughly one percent of the amount the loan that was taken out on the property) it is only a guideline and doesn’t guarantee profitability.

Rent calculations are typically based on many different facets including the following localized factors:

  • Comparable rent prices
  • Property values
  • Vacancy levels
  • Household income

When you accurately price your rent you’ll have the assurance of knowing exactly what your cash flow will be every month. Knowing this key piece of information can help you plan for your financial future and achieve your financial goals.

At HomeUnion we’ve taken the real estate investment process and made it incredibly easy. In addition to providing our customers with pre-vetted properties that are fully managed, we’ve harnessed the power of data driven and proven analytics to accurately price rent. We’ve taken the factors listed above, along with numerous others, to calculate rent and let you know exactly how much cash flow your property will be delivering every month.

Register at HomeUnion.com to see our pre-vetted properties and to learn what kind of cash flow they can deliver!

 

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Lauren Jul 27 2015 - 9:34 AM
Thanks for sharing some tips for accurately pricing your rent! This is a very important step to follow.

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