How much should I charge for my rental proeprty?

[davef]

No comps in the area to go off of.
Zillow says 1.7k. that seems high.
Two bedroom townhouses in the area go for less than 1200.
the schools in the area are horrible.
http://www.zillow.com/homes/46307_rb/#/homedetails/1325-W-98th-Ave-Crown-Point-IN-46307/73375218_zpid/
The mortgage is $968 per month.

I have a trusted firend that is considering renting it, despite the fact that is way too big for just her and her boyfriend.
I would be renting it furnished. What is a fair price to charge her, considering I have the advantage of knowing she is takign good care of the place and good for the $$ 

[Letj]

Ouch, mortgage is way too high considering the comps. Does the mortgage include insurance and taxes? You really should be renting this for at least $2,000 but off course you will not get a tenant or at least a good tenant. You have to rent it for less than $1,200 if that's where the comps are.

[theonethatgotaway]

I wouldn't rent to a friend, because you never know. BUT, she's asked to rent it without knowing the price? And you're now trying to not rip her off yet earn money?  I would list it at a price you can financially deal with. If she can afford it and wwants it, ok. Still though...

Furnished rentals can command 200-500 more per month on top of Comp.

Not sure about the area. Have you Googled cached results?

[escolegrove]

This is a business not a friendship. I hear tons of horror stories about people who rent to friends because of expectations. You need to charge enough to be worth you energy, the risk of your furniture there. Do not let your friend rent at a good deal? My husband is active duty and we have heard of many stories of people renting to their friends. The friends didn't take good care of it because they were "buddies".

If your not in a big city renting it "furnished" usually doesn't get your money. In my area zillow is very low. In most places single family houses with yards get $300 more than townhouses. Even when the townhouses are 500-700 square feet bigger. Your listing didn't come up. So I would guess at $1500 a month is fair with no furniture, $1650 with furniture.

We own 4 rentals. We operate on smaller margin but are VERY carefully of preserving them. As I talk about on my blog it is important that you get as much money as possible to take care of the house. Things will break, she will spill stuff on your sofa, stuff will happen. The people that don't treat this as a business get out!

The houses are one of are largest baskets towards fire even at these small profit margins FIRE.
 

[RobLucky]

Your house is the 4/3 1984 sq ft, fully furnished? Definitely should go for more than a townhouse. Of course you'll still need to allow for yard maintenance on that quarter acre. Tenants don't take a lot of pride in mowing. The Zillow price sounds like a starting point. Add your mortgage, insurance, taxes and maintenance, plus some amount for wear and tear on the furnishings. If that figure comes out higher than your expected rent, you're losing money unless you anticipate that the property will appreciate significantly.

One wacky alternative: look into a vacation rental if there are any attractions nearby. (How far is the commute to Chicago?) A big house like that is attractive to large parties. You can collect the equivalent to a month's rent in a single weekend. If you're deep in suburbia, might not work.

[escolegrove]

Totally agree! Look vacation rentals.

[davef]

Thanks guys.
She stayed there before short term and did great. I'm sure it would be the same long term.
I am thinking 1500 per month. She asked about it because she knew I had it available. And yes, I'm trying not to rip her off but still make money.

Its 50 minutes to Chicago with no traffic. During commuting its more like 80-90 minutes. no noteworthy attractions nearby.
Its 5/2 2400sf. furnished.

Yes, $968 Includes taxes and insurance. In fact, I just drpped my premium by $250 so that should go down to about $946 when they do an escrow analysis. P&I is 700 at %4.75 I'm still debating if its worth refinancing to drop 1 point.

[escolegrove]

If you are going to refinance make sure you do it while it is a personal and not investment. Investment rates are higher. Also note that personal are in the 4's right now.

[davef]

Well. I refinanceed my primary residence to a 5 year ARM last week and got a 3.125% but Yes, I know its higher for a rental property. I only owe 68k over 12 years on the rental anyhow.