How Much Can I Rent My House For - Investor Tips For Rental Valuation

Are you interested in renting out your house? Perhaps you are considering buying a property to let as an investment. The first thing you should do is find out how much you could rent the property out for. This will help you determine a reasonable rental value and figure out if it’s worth renting out. If the rent is too low, you miss out on potential profits. If it’s too high, you may struggle to find tenants and have to deal with long void periods. There are many factors to consider when placing a rental value on a property, both internal and external, such as the size, the condition of the property, what outdoor space it includes, e.g. a garden or driveway, what local amenities are close by, and more. This guide will help to empower you with the knowledge to make an informed decision on how much rent you can charge for your property.

Table of Contents

How Much Can I Rent My House Out For?
Factors That Affect The Rental Value of Your Property
How to Maximise Your Property’s Rental Value

How Much Can I Rent My House Out For?

As mentioned previously, there are many factors that determine the property’s rental value. There is a basic rule of thumb for rental valuation, which can give you a rough idea of the potential rental value, which is 0.8% – 1.1% of the purchase price of the property. So if you bought the property for £300,000, then the monthly rental income will be between £2400 – £3300. This is only a guide price, and all other factors should be taken into consideration when working out a property’s rental value.

Factors That Affect The Rental Value of Your Property

Location

Location is a huge part of determining the rental value of a property. A three-bed semi-detached house within central London is going to command a lot more in rent than the same size property in a small northern town, so we should always consider location as the primary deciding factor of rental value. Even the exact street the property is located on can make a significant difference to its rental value. Consider how close it is to transport links, main roads, schools, shops and other local amenities. Take a look at how much the monthly rent is for similar properties in the immediate locale to figure out a competitive yet profitable rental value for your property.

Size of the property

The size of a property is almost as important as the location when deciding on how much rent you could charge. A small one-bedroom flat would be on the lower end, whereas a larger house with several bedrooms and bathrooms would be worth a lot more. Not everyone is looking for a gigantic house with extensive gardens, but these types of properties will command more in rent. Gardens and driveways are always going to be in high demand, no matter the size of the property, especially if you are looking to rent to families.

Features

New-build properties with modern features or an older house that has been completely refurbished are worth more in terms of rental value than an older, run-down property in need of modernisation. Having a newly fitted kitchen and bathroom, plus other modern touches like a new boiler, an efficient heating system, or triple-glazed windows, can also increase the rental value of the property.

Furnished or Unfurnished?

Most properties that come fully furnished can expect a little more in rental income than those that are unfurnished, but depending on the type of tenant you want to rent to, this might not be the case. Students and young professionals will appreciate a furnished property, whereas couples and families will most likely already have furniture, so they would prefer an unfurnished house. Consider who the property is most suitable for, depending on the above factors and act accordingly. Some types of property, like serviced accommodation, include even more amenities, such as gym access, cleaning, concierge services and more, which can increase rental value.

Local rent control laws

Some local authorities have introduced regulations that cap rental values in certain areas. You should check with the local authority that you don’t overcharge for rent, or you could be subject to legal action.

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How to Maximise Your Property’s Rental Value

There are some things you can do to increase the rental value of your property and attract more tenants. If the property is more than 10-15 years old and has not had any more recent renovations, consider investing in a new kitchen and bathroom. This is not cheap but a surefire way to increase the rental value and resale value of the property. If you do have a budget for more renovations, there are some more things you can do to attract the right kind of tenant, thus increasing rental value. While HMOs and student properties would command higher rent with another bedroom, homes aimed at families and couples would benefit more from a more open-plan renovation, perhaps combining a dining room and kitchen or living room. Just about any property would benefit from an additional bathroom, so if this is possible, then consider adding one.

Make the property look as appealing as possible with some careful staging that increases the kerb appeal. Having a clean, tidy and well-presented property is always going to attract more tenants and command higher rent than a run-down, messy property with an overgrown garden and dirty windows. Remove any rubbish, building materials and weeds from the property, have it professionally cleaned before photography or tenant viewings, and do any repairs on doors, windows, walls, gates and fences.

Consider the type of property and the kind of tenant who is going to want to live there, and market the property accordingly. It’s no good trying to rent an inner city apartment to a family who would probably want a house with a garden in the suburbs, and likewise, students and young professionals don’t want to live miles outside of a city.

Working out how much you can rent your property for involves a little research and knowledge of the local area and current market trends, so it’s worth doing your homework, especially before you invest in a property. If you always own a property you want to rent out, doing market research will help you identify your target audience, and you can start marketing to that specific segment. Always look at other rental values for similar properties in the area – this will give you a good idea of what kind of rental value your property has. Chatting with other local property investors and estate agents can give you a sense of the local rental market too.

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