How to set the rent for your apartment

The rent is set by the amounts in the leases actually signed for comparable homes nearby, adjusted for the differences with your property and for the months the apartment stands empty. Asking prices on the portals are where that calculation begins, not where it ends.

Most owners work the other way round. They look at four listings on the same street, take the highest one they can justify and publish. Six weeks later they learn that the price was wrong without learning by how much, so the same mistake repeats with the next tenant. The method below gives you a range instead of a number, and a rule for what to do when the market disagrees with the price you chose. If you have not yet decided whether you will take on managing a rental property yourself or hand it to an agency, settle that first, because it changes how much of the rent stays with you.

How to reach a specific rent in four steps

The rent for your apartment comes out of four steps: a sample of comparable listings, a discount off the asking prices, adjustments for the differences with your home, and a check against the annual income. The result is a range, and you pick a specific price from inside it.

1. Collect the sample. Find at least six current listings for homes within walking distance of yours, close in floor area and room count and in similar condition. Record the price, the area, the condition, the furnishing and the date you saw each listing. At six listings a single odd offer stops distorting the picture; below six the conclusion stays uncertain.
2. Discount the sample. Asking prices sit above signed rents. Cross out the highest and the lowest and treat what is left as an upper bound rather than a target.
3. Adjust. Write down every difference between your apartment and the homes in the sample. Turn each difference into an amount up or down and record it next to the difference itself, before you look at the total.
4. Check against the year. Multiply the candidate price by the number of months you realistically expect the property to be let, not by twelve. Compare the result with the same calculation at a slightly lower price and a shorter empty period, and keep both calculations. The higher monthly rent does not always win.

Which listings are genuinely comparable to your apartment

A comparable is a listing for a home within walking distance of yours, close in floor area and room count, in similar condition and with similar furnishing. Everything else drops out of the sample.

Distance is the strictest of those conditions. Two apartments on opposite sides of a boulevard can belong to different rental markets if one side has a school and a bus stop and the other does not. Walk the distance instead of measuring it on the map.

Throw out four kinds of listing, however tempting the price in them. A home in a new building with a concierge and secure parking is not comparable to an apartment in a prefabricated block, whatever the floor area says. A furnished listing is not comparable to an unfurnished one until you have made the adjustment for it, and at this stage you have not made it yet. A listing that has been reposted for months is telling you that its price is wrong, which is exactly why it cannot serve as evidence of the right price. A run of nearly identical listings from the same agency is one point in the sample, not five.

If you cannot reach six comparables, widen the radius before you relax the requirement on condition or floor area. A more distant apartment in the same condition tells you more than a near one in a different condition.

Why asking prices are not the rents actually signed

An asking price is the owner's opening position, not the amount in the contract. Correctly priced apartments leave the portal quickly, so what stays on the screen is mostly what nobody took.

The gap comes from two things. The first is negotiation: a tenant who has already seen four apartments arrives with a figure of their own, and the final number often settles between the two. The second is the visibility of the unlet listings themselves, which lifts the average without anyone intending it.

That makes the time a listing has been up the most useful signal in your sample, and it costs nothing. Note the date you saw each listing and check the same listings a week later. The ones that have gone were close to the market. The ones still there, especially those that reappear with a new date and the same photographs, were not.

One rent actually signed is worth more than ten asked. Ask the neighbour who let their apartment in the spring what the tenant actually pays. Ask an agent who works with a similar home where the last deal closed, and expect a range rather than an exact figure.

How to turn the differences between properties into amounts

Every difference between your apartment and the comparables is written down as a specific amount up or down, before you look at the final number. Only the differences a tenant pays for willingly belong in the calculation.

Derive the amounts from your own sample rather than from a general rule. If two otherwise similar apartments differ only in that one is furnished, the gap between their asking prices is your furnishing adjustment, discounted downwards like any other asking price. If your sample has no such pair, the honest adjustment is a small one, because you have no evidence for a large one.

Apply this test to every line: would a tenant choose your apartment over an identical one and pay more because of this feature, or would they merely notice its absence? A working lift, a parking space and a storage room pass the test. New tiles in the bathroom, a freshly painted hallway and a good kitchen worktop usually do not, because they shorten the time to let instead of raising the rent.

The two directions are not symmetrical. An absence takes away more than a presence adds. A ground floor apartment on a noisy street, a top floor without a lift or a bathroom with no window will cost you more than any single refurbishment wins back.

Then cap yourself. If your adjustments take you more than about a tenth away from the middle of the comparable range, the problem is usually the sample and not the apartment. Go back and find closer comparables instead of defending a large adjustment.

What a month without a tenant costs you

A month without a tenant erases about a twelfth of the annual income, so a price held high for three months almost never pays for itself out of the higher monthly figure.

Do the calculation with your own two numbers instead of taking that on trust. Multiply the ambitious price by eleven months and the realistic one by twelve. The larger number is the answer for your apartment. The gap between the two prices usually has to be substantial for the ambitious one to win, and every additional empty month makes that harder.

An empty apartment does not only cost you the rent. The building maintenance fee keeps running. So does the heating in winter, because an unheated home in a cold block takes on damp. Your own time keeps going into viewings that lead nowhere. None of this shows up in the monthly figure you are defending, which is why waiting looks cheaper than it is. Waiting deliberately, for a reason you can state, is a decision; waiting because the number feels right to you is not.

Higher rent or a tenant who stays longer

A higher rent usually shortens the stay, so choose between the two before you publish by comparing one year at the ambitious price with three years at a lower one. Include the empty periods between tenants in both calculations.

Every change of tenant costs you the same set of things: an empty period, which you judge from your last changeover, cleaning and repainting, replacing what has worn out, the days spent on viewings, and the risk that the new tenant turns out worse than the previous one. The bill adds up quietly. At the top of the range you attract people for whom this apartment is the best thing available this month and who will move the moment something better appears. Slightly below it you attract people who want to settle and who will accept a moderate annual increase rather than move again.

Decide which of the two you want before you publish, not after the first viewing. If stability matters to you, set the price in the middle of the range or slightly below it, say so in the listing, and accept that you are giving up part of the monthly income. If you are letting only for a fixed period because you plan to sell the property or move back into it, the top of the range is the right target and tenant turnover is not your problem.

Who pays the utilities and the building maintenance fee

Rents are comparable only between listings with the same split of costs. If the building maintenance fee and the utilities are inside one price and not the other, the two numbers are not comparable.

Before any comparison, bring the sample onto a common basis. For each listing, note whether the price includes the building fee, the utilities and the internet. When a listing is silent on the point, assume that it does not include them, because that is the more common arrangement. Then compare like with like, and remember that an all inclusive price has to be visibly higher to mean the same thing.

The usual split follows custom rather than a rule, which is exactly why it is written into the lease before the first bill arrives. By custom the owner carries the costs of the property itself: the building fee, the insurance, the taxes and repairs to the furniture and appliances that came with it. The tenant carries what they consume: electricity, water, heating and internet. Any departure from that, in either direction, goes into the lease in the same words you used in the listing.

An all inclusive price looks simple to a tenant comparing listings, but it transfers the whole risk of a cold winter to you and removes every reason for the tenant to be careful with the heating. If you use it anyway, base it on what the apartment actually consumed last winter rather than on an average.

When and by how much to adjust the price

Set the adjustment rule before you publish: if the enquiries are too few within two weeks, or there are no viewings within three, the price comes down by one step, not by a fifth.

Enquiries and viewings fail for different reasons, so read them separately. Few enquiries means the price, the photographs or the text of the listing are not working at first glance, and of the three the price is the quickest to test. Many enquiries without second viewings means the apartment is not what the listing promises, and cutting the price will not fix that. Viewings without offers usually means the price is close, but the apartment has a visible problem that a small reduction would offset.

Move by one step and wait a full week. A small reduction republishes the listing, lifts it back up the results and brings you new information. A large one tells you nothing, because you changed too much at once, and it also becomes the price you will be renewing from for the whole tenancy.

The season changes the timetable, not the number. In a quiet month give it another week before you conclude that the price is wrong, because weak demand looks exactly like a pricing problem for the first two weeks. In a busy month apply the rule earlier, since two weeks without enquiries is a clearer signal when everyone is looking.

What to write down before you publish the listing

Write down the comparables, the adjustments together with their amounts, the price you chose and the date. The next time you set a price you start from your own data instead of from nothing.

Five things are enough. The six comparables with their prices and the date you collected them. The adjustments, each with its reason next to it. The final price and the range it came from. The date you published and the date you signed. And the number of enquiries and viewings week by week.

The record earns its keep at two specific moments. At renewal it shows whether your rent has fallen behind the market or run ahead of it, which separates the increase you can justify from the argument you cannot win. When the tenant leaves, you repeat the method in an hour instead of an evening, because you already know which listings to look at and what adjustments you made last time.

After a year of letting, the most important record is the payment history: what was agreed, what was paid, when it arrived and what you spent on the property in between. The platform for owners keeps the information about properties, tenants, leases and payments in one place, instead of those numbers being hunted through emails and notebooks exactly when they are needed.