How Much Should I Charge for Rent?

There are many factors to consider when setting a rental price, such as local rent control laws, the cost of similar rentals in the area, and changes in the local market. 

According to the Zillow Group Consumer Housing Trends Report 2024, 95% of renters also consider it essential that their home is within their initial budget. If you price your rental too high, your place could sit unoccupied. Too low, and you run the risk of losing money on your investment.

These are the basics of deciding how much to charge for rent and ways to collect rent from your tenants. For more information on being a landlord, check out Zillow Rental Manager. You can create and manage a rental listing, post it on Zillow, Trulia, and HotPads, screen tenants, manage rent payments, and more.

Note: This guide is for informational purposes only. Zillow, Inc. does not make any guarantees about the sufficiency of the information in or linked to from this guide, or that it’s compliant with current, applicable or local laws. Landlord-tenant laws change rapidly and may be regulated at the federal, state and local levels. This resource is not a substitute for the advice or service of an attorney; you should not rely on this resource for any purpose without consulting with a licensed attorney in your jurisdiction.

Look up rent control laws in your area

Not all states or localities have rent control laws, but those that do may limit the amount of rent that can be charged, the frequency of rent increases, and the amount of any rent increase. Rent control laws are typically set at the local level, so the average rent price by city will vary. As of 2024, places with rent-control laws are:

• California
• Maine
• Maryland
• Minnesota
• New Jersey
• New York
• Washington, D.C.
• Oregon

Be sure to check with an attorney to determine whether your city has rent control and what laws and restrictions are in place before you determine how much you should charge for rent.

Research the rental value of homes in the area

It’s important to know how your property stacks up against other properties in the area. For example, if your property offers more bedrooms or bathrooms or has other amenities renters want, you might consider a higher rent price based on the added value your home delivers.

Aside from the property itself, a home’s rent price can be influenced by location and neighborhood amenities.  We found that 56% of renters say their commute to work or school influences their home choice, 55% want to live in a walkable neighborhood, and 53% of renters noted that living close to shopping, services, and leisure activities was among their top three criteria when looking for a rental home. Here are some other highly important home and neighborhood characteristics for renters:

Check changes in the local market

Remember that rent price is a dynamic value that changes in response to your local market conditions. It’s ultimately up to you to decide what to charge and whether to increase (or decrease) rates at lease renewal time.

Determine a rental price using Zillow’s Rent Zestimate tool

A Rent Zestimate is Zillow’s estimate of a home’s monthly rent price. It’s available for 125 million homes in America and is a helpful tool for landlords who want a starting point to determine appropriate monthly rent prices.

The home data we’ve compiled to generate a Rent Zestimate varies by location — some counties provide more comprehensive property information than others. You can visit your home facts page to ensure everything’s up to date — if you haven’t yet claimed your home on Zillow, we’ll verify your ownership first, which is a quick and simple process.

Budget for repairs, maintenance, and utilities

Use accounting software or a simple spreadsheet to help plan for the cost of repairs and maintenance. Over the course of a year, maintenance may cost around 1% of the property’s value, so consider setting aside 50% of your rental income to spend on repairs. If you’re including any utilities or other services in the rent price, you’ll also need to get an estimate of what those costs will be when your property is occupied.

Determine the best ways to collect rent from your tenants

Once you’ve figured out how much you should charge for rent, you’ll want to determine the best way to collect rent — either online or offline. This will vary depending on your tenants, but you might consider offering multiple ways to collect rent. According to Zillow Group Consumer Housing Trends Report 2024 survey data, 65% of renters say they pay their rent online, but 73% would ideally pay their rent online. Here are some other ways to collect rent:

• Through a property manager: Even if you don’t hire a property manager to oversee your property, you can hire one just to collect rent.
• Face-to-face payments: You can collect rent in-person
• Mail: You can have the tenant send you a personal check, money order, or cashier’s check.
• Dropbox: This option is more secure than sending a check through the mail and doesn’t require you to meet in person.
• Direct deposit: Your renter can set up an automatic online transfer from their bank account to your business checking account.
• Electronic payment: You may be able to use a rent collection service to collect rent electronically. Zillow Rental Manager offers an online payment tool that is free for you — and for your tenant, if they choose to pay with ACH. Or there are payment apps, like PayPal or Venmo. 

What should you know about late charges for rent?

Lease agreements typically require the renter to pay rent in full by a specific date each month — but you may occasionally encounter a situation where rent is late. Late charges for rent may not apply until after a grace period (e.g., three days after the rent due date), and they’re often structured as a flat fee, a percentage of monthly rent, or a daily rate. Many states have laws that establish minimum grace periods and cap the amount of late fees, so you should consult local counsel and be sure to include late fee details in your lease agreement.