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What rent should I charge?

There are two questions hiding inside this one, and only one of them is arithmetic. What the market will pay is decided by the block your property stands on, and you read that off the listings around you. What the property has to earn is a sum, and this page does it: mortgage, tax, insurance, reserves and the shares taken off the top, worked into the rent that covers them all. Put your own comparable rent in beside it and you get the number that actually matters, which is the gap between what the property costs to hold and what the street will pay for it.

§ 01 Your numbers

Change anything. The answer updates as you type.

Principal and interest only. Leave the tax and insurance out of this box even if your lender escrows them, because they have their own lines below and you would otherwise count them twice.
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Escrow is the reason this line gets double counted so often. Your lender collects one figure a month that contains the loan payment, the property tax and the hazard insurance, and it is entirely natural to type that whole figure here and then fill in the tax and insurance boxes as well. Pull the principal and interest apart from the escrow on your statement first. If the property is owned outright, put zero here and the arithmetic still works: your floor is then the tax, the insurance and the reserves, which is a lower floor and a real one.
The annual bill from your county, divided into the monthly figure by the calculator. Use the actual assessed bill rather than an estimate from the purchase price.
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Two things move this line in ways that catch new landlords. The assessment can be reset when a property changes hands, so the tax the previous owner paid may not be the tax you will pay. And several states tax an owner-occupied home at a lower effective rate than the same building let to a tenant, through a homestead exemption that ends the day you move out. If you have just converted your own home into a rental, check your bill rather than carrying the old figure forward.
A landlord or dwelling policy, not a homeowner policy. They are different products and the second one generally will not answer a claim on a let property.
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A homeowner policy is written for a building the owner lives in. Once there is a tenant, the risk changes shape and so does the cover: a landlord policy adds liability for injuries to a tenant or their guests, and usually adds loss of rent if the building becomes uninhabitable while it is repaired. It also drops the contents cover you no longer need, since the tenant's belongings are the tenant's problem and their renter policy is the answer to it. Ask your carrier for the landlord version of the quote before you put a figure here.
Zero if there is no association. If there is, this is a fixed line that arrives whether or not the unit is let, which is exactly why it belongs above the vacancy slice rather than inside it. Special assessments are a separate matter and belong in the capital reserve below.
Water, sewer, trash, common area power, lawn care, snow clearing. Zero if the tenant is billed for everything.
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Whether you or the tenant pays is a genuine pricing decision rather than a detail. A rent that includes water lets higher on paper and exposes you to a leak you cannot see and a tenant with no reason to report it. A rent that excludes it lets lower and moves that risk across. Whichever you choose, the figure has to sit somewhere, and putting it here means the calculator will raise your floor by it rather than quietly leaving it out.
The running repairs: the failed disposal, the blocked drain, the door that will not close, the turnover paint. Your own figure, from your own building.
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This is the line that separates a rent that looks profitable from one that is. Repairs on a let property do not arrive evenly and they do not arrive when convenient, and a year with none is not evidence that the reserve was unnecessary. It is evidence that the reserve is still there for the year that has three. If you have owned the building a while, add up what you actually spent over the last three years and divide by three, which will give you a better figure than any rule of thumb. If it is a new purchase, an older building with original fixtures deserves a larger number than this default and a recently renovated one a smaller.
The roof, the furnace, the water heater, the windows, the driveway. Things that fail once a decade and cost thousands when they do.
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The honest way to fill this in is to list the big components, put a replacement cost and a remaining life against each, and divide. A water heater at $1,800 with six years left is $300 a year. A roof at $14,000 with fifteen years left is a little over $900. Do that for the four or five items that matter and you will have a figure built from your own building rather than a guess, and you will also have a schedule of what is coming, which is worth as much as the number. Landlords who skip this line are not saving money. They are borrowing it from a future month that will arrive anyway.
The share of the year the unit earns nothing: between tenants, during turnover work, and while it is listed. This comes off the top of the rent, not off the end.
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Eight percent is roughly one month in twelve, which is what a single turnover with a few weeks of listing and repainting tends to cost. It is our default and it is a placeholder for your own experience. A long stable tenancy in a tight market can run far below it for years. A student let that turns over every summer, or a unit in a soft market, can run well above. Note also that vacancy is not a cost you pay: it is revenue you never receive, which is why it behaves as a share of rent rather than as a bill, and why it has to be divided out rather than added on.
Zero if you manage it yourself. If an agent does, this is their monthly percentage of collected rent. Letting fees and renewal fees are separate and belong in the maintenance line.
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The monthly percentage is the part people quote and it is rarely the whole arrangement. Ask also for the letting fee charged when a new tenant is placed, which is often a large share of one month's rent, the renewal fee when a sitting tenant signs again, and the markup added to repairs the agent arranges. Those are real and they do not appear in the headline percentage, so put them into the maintenance reserve above rather than leaving them out of the sum entirely. And note what this line does to the arithmetic: like vacancy, it is taken from the rent before it reaches you, so it has to be grossed up rather than added.
Your own research, from the listings you can read: the same bedroom count, the same rough condition, the same few streets. This is the one number on the page that answers what the market will pay.
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Read the listings rather than the estimates. Look for units with your bedroom count and bathroom count within a short walk, and discount anything with a feature yours lacks, because a second bathroom or off-street parking or in-unit laundry moves rent more than square footage does. Watch how long each listing has been up: a unit that has sat for six weeks is telling you its asking price is wrong, and it should not anchor yours. And check what the ones that vanished quickly were asking, since those are the prices the market actually agreed to rather than the prices somebody hoped for.
Estimated cost
$2,410
  • Mortgage, principal and interest$1,450
  • Property tax (annual bill ÷ 12)$300
  • Landlord insurance (annual premium ÷ 12)$117
  • HOA or condo dues$0
  • Utilities you pay$0
  • Maintenance and repairs reserve (annual ÷ 12)$200
  • Capital reserve, roof and furnace and water heater (annual ÷ 12)$150
  • Vacancy allowance (a share of the rent, taken off the top)$193
  • Management fee (a share of the rent, taken off the top)$0
  • Total$2,410
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The comparable rent covers your floor and leaves a modest margin. That is a working rental rather than a comfortable one, and the thing to watch is that the margin is thin enough for one bad turnover or one failed furnace to erase a year of it. Check that the two reserve lines above are set from your own building rather than left at our defaults, because a thin cushion computed on an optimistic reserve is not really a cushion.

What this assumes, and where it could be wrong

Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.

VACANCY AND MANAGEMENT ARE A DIVISION, NOT AN ADDITION, AND THE ERROR ALWAYS RUNS SHORT.
These two lines are shares of the rent, taken off the top before the money reaches your mortgage. So the rent that leaves your fixed costs standing is those costs divided by what is left after the slice, not those costs raised by the slice. Take a $1,000 floor with 8% vacancy and 10% management. Eighteen percent comes off the top, so 82% has to cover the $1,000, and the rent is $1,220. Add 18% to $1,000 instead and you get $1,180. The $40 gap is the part of the slice that has to fund itself, and it is invisible precisely because it is a second-order effect. It grows with the slice: a heavier management fee or a rougher vacancy record widens it. This page does the division.
The reserves are the two lines people leave out, and leaving them out does not make them go away.
Maintenance is the running repairs and capital is the components that fail once a decade, and neither arrives on a schedule that matches your rent roll. A year with no repairs is not a year the reserve was unnecessary; it is a year that funds the one with three. Set the maintenance figure from what you have actually spent over the last few years if you have the history, and build the capital figure by listing the roof, the furnace, the water heater and the windows with a replacement cost and a remaining life against each. A rent set without these two lines looks like it clears and does not.

What the market will pay is a separate question from what the property costs, and this page only computes the second one. The comparable rent box is your own research from the listings on your own streets, because there is no substitute for reading them: the same bedroom count within a short walk, discounted for the features yours lacks, with attention to how long each listing has been sitting. A unit that has been up for six weeks is telling you its asking price is wrong and it should not anchor yours. The two answers meet in the cushion figure, and the cushion is the number that decides whether the property works.

The floor is not a target and setting rent exactly at it would be a poor idea. It is the line below which the property is being subsidised out of your other income, which is a thing you may choose to do deliberately while a market recovers or while a good tenant stays put. What it should never be is a thing you discover in the third year. Knowing the floor is what lets you make that choice on purpose, and it is also what tells you how much room you have to hold rent steady for a tenant worth keeping.

Income tax and depreciation are not in here, deliberately. This page is about whether the rent covers the building, and the tax treatment of a rental is a separate and genuinely involved question: rental income is taxable, mortgage interest and the operating lines are deductible, the building itself is depreciated over a fixed schedule, and that depreciation is recaptured when you sell. All of it changes what you keep and none of it changes whether the rent clears the bills each month, which is what the sum above answers.

Frequently asked questions

What rent should I charge?
Enough to clear two tests, and they are different tests. The first is arithmetic and this page does it: add up the mortgage, the property tax, the insurance, the association dues, any utilities you pay and the two reserves, then divide by what is left of the rent after vacancy and management take their share off the top. That is the floor, meaning the rent below which the property is being funded from your other income. The second test is the market, and no calculator can answer it for you, because it is decided by the listings within a short walk of your front door. Read those, put the figure in the comparable rent box, and the page will show you the gap. If the comps sit well above your floor you have room to price for a tenant who stays. If they sit below it, the property has a problem the rent cannot fix on its own.
Why divide by the vacancy rate instead of adding it on?
Because vacancy is not a bill you pay, it is rent you never collect, and the same is true of a management percentage. Both come out of the rent before any of it reaches your mortgage. So if 18% comes off the top, only 82% of the rent is available to cover your fixed costs, and the rent you need is your costs divided by 0.82. On a $1,000 floor that is $1,220. Adding 18% to $1,000 gives $1,180, which is short, and it is short for a reason worth understanding: the extra 18% you added is itself rent, so it is itself subject to the vacancy and the management fee. The slice has to fund itself as well as the costs beneath it. The gap is modest at small percentages and grows quickly at large ones, and it always runs in the direction of undercharging.
How do I find out what similar places rent for?
Read the live listings rather than any automated estimate. Filter to your bedroom and bathroom count within a short walk, and then adjust honestly for the things that move rent more than floor area does: a second bathroom, off-street parking, in-unit laundry, outdoor space, and whether utilities are included in the asking price. Pay close attention to time on market. A listing that has been up for weeks is evidence that its asking price was wrong, and it is a poor anchor for yours. The units that let quickly are the ones telling you what the street agreed to. If you can, ask a local agent what they placed recently and at what figure, since that is the transacted price rather than the hoped-for one.
Should I charge less to keep a good tenant?
It is frequently the right call and the calculator above tells you whether you can afford it. A turnover costs you the empty weeks, the listing effort, the cleaning, the painting, the screening and often a letting fee, and a tenant who pays on time and reports a leak early is worth real money that never appears on any statement. So the question is not whether below-market rent is a loss, it is whether the discount is smaller than the turnover it avoids. Work out your floor here, look at the cushion between it and the market figure, and you will know how much room you have. Holding rent flat for a sitting tenant is a legitimate use of that cushion. Holding it below the floor is a subsidy, and it is one you should at least be making on purpose.

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