What factors determine how much rent can be charged on a property?

Asked on by mbata

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

In the end, what determines this is a combination of supply and demand.

If a property has nothing to distinguish it and there are many other properties like it, supply is relatively high and the owner will not be able to charge a lot of rent.  

However, if the supply of similar properties is low relative to demand, a higher rent can be charged.  If the property is in some way outstanding, there will be few real competitors.  This would be something like an apartment complex with a great view or with really good amenities.

There are many factors that come into play.  But the basic question is of how many people might want to rent the property compared to how many similar properties are available.  The higher the demand relative to the supply, the higher the rent that can be charged.

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