It can be difficult for owners to know how much rent to charge for a rental, especially if you have only one or two properties, and it has been a while since you last advertised the home. 

There are some common factors to look at when setting the rent, and it is good to be aware of not setting the rent too high or too low, which can affect both interest and the quality of tenants who apply. 

How to set the rent for your investment property.  

1. Check out the Tenancy Services stats for your suburb. 
2. Is your rental property a house, flat, apartment, or something in between?
3. Have a look at similar properties for rent in the same area. What makes your rental home stand out compared to others? Does it have an upgraded kitchen and bathroom, double glazing, a family friendly section, good school zones, or allow pets? 
4. Think about the tenants you want to attract. Would you prefer a group of young professionals, so the rent can be covered easily? An older couple who will love spending time in the garden? Or a family who will stay long term while the children are at school. Once you know the type of tenants you would like you can add some features to attract them, which may enable you to set the rent a bit higher. 
5. Does your property have energy saving features that will appeal to long term tenants? If you have a new home, or have made energy updates, emphasise these. LED lights, heatpumps and HRV systems, electric car charging, and easy access to bike lanes and public transport are all desirable aspects. 
6. Have you completed all requirements for the Healthy Homes Compliance Certificate? Tenants are aware of these requirements, and may bypass your home if it doesn’t have a current compliance certificate. If there is anything left to do it’s good to get this completed before you re-let the property. 
7. Remember it is not legal or acceptable to discriminate on the basis of someone’s race, gender, family status or employment. Don’t let bias get in the way of meeting some great prospective tenants! 
8. Be careful about how you advertise and what questions you ask. The new tenancy guidance recently issued by the Privacy Commissioner has strict compliance standards, so don’t ask more than the minimum required at each stage of the tenancy application.
9. Don’t let emotional attachment determine the rental price. Rents are calculated mainly on area, suburb and number of bedrooms. 
10. Regardless of the type of home and price bracket, make sure it is sparkling clean, lawns mown and gardens tidy. 

What is a rental appraisal?

A rental appraisal by a Property Management agency is often required by your bank or mortgage broker, to ensure the rental income is sufficient to cover your lending and other costs. You may also want an appraisal when considering a new investment purchase, to see if income will cover your costs. Most investors will have a ROI formula (return on investment) when weighing up a property purchase.   

To carry out a full appraisal we take into account all the above factors, along with assessing the property against other similar homes we manage, and knowing what features tenants are currently looking for. The time of year, immigration numbers, and employment stats all affect current market rents. 

If you would like an updated rental appraisal on your property, please phone the Ruby Housing office on 03-3795033 or email office@rubyhousing.co.nz, and I’ll get back to you very soon! 

• Kim Willems
• Managing Director
• Ruby Housing