How Much Will My Home Rent For in Denver? A lot of homeowners find themselves asking that question. Many people these days are using rental properties as an additional form of income. Instead of selling their home outright when ready to move, they are taking the option of turning their house into a rental property. This decision comes with challenges and decisions to be made.
What Can I Charge For Rent In Denver?
When deciding what to charge for rent, there are several factors to consider.
- How much your mortgage payments are.
- How much your home is worth.
- How much rental properties are going for in the area.
- Property taxes, HOA fees, and other extra costs.
There are some questions you need to ask before deciding to rent out your Denver home. There are many factors that determine your rental market value.
How Much Is Your Mortgage?
If you are planning on using the rent to pay the mortgage on the property, it is important to factor in taxes and other fees. Insurance, HOA, and possible repairs should also be considered in addition to the loan.
What Is The Market Value Of Your Home?
Your home’s market value can play a factor in what you charge for rent. A general rule of thumb is to charge between 0.8% and 1.1% of the market value. If your home has a lower market value, feel free to charge 1%. If it is in the higher price range, use a lower percentage rate to figure the rent. If you own an expensive home in an expensive neighborhood, charging the highest percentage can make the payments beyond the reach of most renters.
Area Going Rates
Local rental rates for comparable properties in the area influence what you should charge. Local listings can give you an idea of what the going rate is in your area. Also, keep in mind state and local laws and restrictions.
Pros and Cons of Owning a Rental
Depending on the condition of your home, it may require some investment in repairs to bring it up to code or rentability standards. After the renters are in, a clogged toilet or leaky faucet can be an out-of-pocket expense. Renters, no matter how reputable they may be, can be hard on a house. Be prepared to fix, replace, and update between renters to keep your property fresh for the rental marketplace. And, of course, there is always the lull between renters to think of, especially if you still have a house payment to be made.
On the flip side, having renters can help you pay off your mortgage and bring in a bit of extra cash. As a somewhat short term investment, you can keep your mortgage paid until you have enough equity to sell at a profit, or until the value of your home increases. As a long-term investment, rental properties can provide a nice addition to your retirement fund.
Contact Us Today
Renting out your Denver home doesn’t have to be a hassle. If you are still not sure you want to become a landlord, the staff at Cobalt Creek Property Management would be happy to share our expertise. Contact us today for a rental market evaluation in the Denver area to help you decide if renting out your home is a viable option for you.