How much rent should you charge your tenants?

2 min read

Buy-to-rent is one of the factors driving the property market in the UK, pushing house prices up after the financial collapse a decade ago.

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As the financial markets collapsed, the safe haven of the property market became attractive again, although it has taken some time for property prices to return to an upward curve.

Being a landlord comes with responsibilities, which can be checked on the government website.

The rental market is taking up the slack, so private landlords are not short of potential clients. In a competitive market, it is vital that landlords should have a clear idea of how to set their rents.

The initial investment in bricks and mortar can have long-term benefits, with the short-term assessment of your rental income key to this. An empty property is not going to service your debt, nor will it give you a good return on your capital investment if it is mortgage-free.

The first step in calculating your rental income is to check the comparative prices in the local area. It is not only the flat-rate rental for comparative properties to look at but also the extras that landlords are offering. Free internet and TV packages are often used as incentives, especially for younger renters – such as students – who may also want a workstation.

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Property inventory software

Before a contract begins, a secure inventory of the property should be undertaken. Property Inventory Software can be used to establish the contents and condition of the property at the beginning and end of a lease.


The location of the property and the contents, if furnished, will also impact the rental tariff. A garden, secure parking and the quality of the fixtures and fittings will also have to be taken into consideration when setting the rent.

Another area to consider is any service charge attached to the property and any services, such as a concierge or maintenance man or gardener. All these add value to the property and should be reflected in the rent.

Finally, you should make sure you are receiving an adequate return on your investment. A good rule of thumb is a seven per cent return on your outlay. Take into consideration the tax payable on your income from this kind of investment and adjust the rental accordingly.

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