How to Set the Right Rent

Most landlords set rent the same way: they look at a few listings, pick a number that feels right, and hope for the best. It works, sort of. But it leaves money on the table — or worse, it prices out good tenants and extends void periods.

Rent is the single biggest lever in your return. Getting it right is worth more than almost any other decision you'll make on a property.

The Cost of Getting It Wrong

Underpricing is obvious: you earn less than you could. But the hidden cost of overpricing is often worse.

An extra £50/month sounds good on paper. But if it adds two weeks to your void period, you've just lost £600 — wiping out the gain for the entire year. And if it pushes away a reliable tenant in favour of a marginal one, the downstream costs multiply.

Overpricing also attracts fewer enquiries, which limits your ability to choose. The best tenants have options. If your listing lingers, you end up with whoever is left.

Start With Comparables

The foundation of pricing is understanding your market. Search for similar properties within a mile or so: same bedroom count, similar condition, comparable transport links. Note what they're asking and, if possible, what they actually let for.

Pay attention to how long listings stay active. A property that's been available for three weeks is probably overpriced. One that lets in days might be underpriced — or simply well-positioned.

This step sounds basic, but most landlords skip it or do it superficially. Take an hour. Look at ten listings. You'll learn more about your market than any report will tell you.

Adjust for Condition and Features

Not all two-beds are equal. A freshly decorated flat with modern appliances will command more than a tired one with dated fittings. Parking, outdoor space, and storage all shift the number.

Be honest about where your property sits. If it's average, price it at market. If it's above average, you can push slightly higher — but not as much as you think. Tenants discount imperfections faster than landlords expect.

The same applies to location quirks. A noisy road, a steep hill, a long walk to the station — these matter, even if you've stopped noticing them.

Factor in Void Risk

Yield isn't just rent minus costs. It's rent minus costs, adjusted for the probability of vacancy.

Aggressive pricing increases void risk. Conservative pricing reduces it. The optimal price is the one that maximises expected annual income — which is not always the highest monthly rent.

Think of it like selling a house. The goal isn't to list high and hope. The goal is to find the price that attracts demand quickly and reliably. A property that lets in a week at £1,150 is often worth more than one that lets in six weeks at £1,200.

Review Annually

Markets shift. Inflation moves. New supply enters your area. A rent that was right two years ago might now be too low or too high.

Set a calendar reminder to review rent once a year. Look at fresh comparables. Consider the tenant's track record — a reliable payer with no issues is worth something. Then decide: hold, adjust modestly, or reset.

If you're raising rent, communicate early and clearly. Explain that you've reviewed the market and your costs, and that the new rate reflects both. Tenants accept increases more easily when they understand the reasoning.

Use Data, Not Instinct

Guesswork is expensive. The best landlords treat pricing like a discipline, not a feeling. They track what comparable properties let for, how long they sit empty, and what drives demand in their area.

Tools exist to help. Portals publish asking rents. Indices track local trends. Platforms like Letted pull comparable data automatically and surface pricing recommendations based on real-time market conditions.

You don't need to obsess over every pound. But you should know, with confidence, that your rent is positioned correctly. That confidence comes from data — and it protects your yield far more than any optimistic assumption ever will.