Dear PoPville – How Much Should I Charge for my Rental?

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Dear PoPville,

I have a super small 1 bedroom (apprx 450 sq ft) on U Street (between 15th and 16th) that has a decent outdoor space, enough for a garden, wood floors, washer/dryer, updated a few years back. I will be relocating and renting out my home of the last several years. I’m out of touch w/rental costs. I want to charge a reasonable rent. The gentleman that sold me the condo gave me an amazing deal because “I was young and deserved an opportunity”. I want to pass that on πŸ™‚

After paying my mortgage, etc. $1450 (that includes utilities) seems fair. Would that be considered affordable and fair?

72 Comment

  • That seems a bit low. I would probably charge closer to $1900.

    • I pay $1950 in a building with a concierge and good, private outdoor space, and I have a 1 bedroom that’s about 600 sq. feet. I’m about 5 minutes off U street. Someone I know rents a 1 bedroom literally on U for about 1600. It’s probably around 500 sq ft with no outdoor space. So 1900 seems quite high for 450 sq. ft. There are lots of place on U where you can get 600 sq. ft for that.

    • I understand some people can afford $1,900. Or others can afford $1,600. But honestly I couldn’t even afford $1,450. When I was searching for nice 1 bedrooms along 16th st between Dupont and Columbia Heights, I could find decent places for $1,350. Now a 1 bedroom in the same apartment less than 4 years later costs nearly $2,000?!! No, sorry, but my yearly raise comes no where close to that inflation.

      If the OP can afford to rent it for $1,450 with out screwing yourself over, how about offering someone else in this city that just can’t afford its outrageous prices a chance to not spend 2/3 of their monthly paycheck on rent. Someone gave them a chance, it sounds like they want to pass on that good karma.

  • Where will you be posting the ad for it, for those of us who may be interested?

  • $1650. Space is too small, but the washer and dryer and it being up the street from the U street Metro (not to mention being on U street itself) bumps the price up.

  • If it’s is a basement, then I say $1900.

    If it’s not a basement, then I say $2200.

  • As someone currently looking for a small apartment or studio in the U Street area, it seems like this is comparable to what other units are going for. I’m a young professional trying to live on my own for the first time in DC, and would definitely be interested!

  • Emmaleigh504

    $1450 Seems low for a 1 bedroom with outdoor space and a washer/dryer. That’s less than what studios are going for in my ‘hood. I would charger 1600-1800 to give someone a deal.

  • Including utilities (I assume no cable/internet though), I’d say $1450 would be too low. $1600-1650 would be “affordable and fair” and $1800 would be market rate for a true 1 BR (though this sounds like it would be called a Jr. BR) with a W/D and outdoor space that is updated. I’m guessing this an english basement or ground floor.

    • Hi guys, thanks for the great feedback. I guess I would consider it a junior 1 bedroom, the room has windows and a closet but it’s a small room. It is an english basement, but the outdoor area is about 12×6 ( I measured last night) and it’s not a dark space. I’m lucky to have decent light. Utilities don’t include cable πŸ™‚ just water+electricity.

      • Our landlords give us an incredible price for our 700 sq ft 1 bedroom ($1575, water inc’l) and in turn we are responsible, long-term tenants. Here is my recommendation: find a couple who intends to stay for awhile, will keep the green space well-tended, and cut them a deal at $1450.

  • $1450 seems too low for a one bedroom with outdoor space and washer/dryer in a popular neighborhood. That’s how much studio apartments with no outdoor space and no washer/dryers are going for in my building in Adams Morgan. If you want to be affordable and fair I would say around $1600 all utilities included

  • Mind you this is with utilities included. A friend of mine is paying close to $2K for a place near there w/out including utilities so it’s probably around $2220 a month for him. The $1650 I put out might actually be too low. This person could definitely charge $2000 w/utilities and a washer and dryer, easily.

  • Those suggesting $1900 are way too high. Unless this is splendid and has new appliances, it should be around $1400 to $1700. Its smaller than some efficiencies sq. footage wise. And few would pay $1900 to live on (noisy) U Street when some of the new buildings in area will likely be renting their apartments for about $1900.

    • “some of the new buildings in area will likely be renting their apartments for about $1900.” 1 bedrooms for $1900 in a new building on U Street?

      • new buildings are renting studios for over $2000 even several blocks north of u st. that said, you’re paying partly for amenities and a (relative) guarantee of a good landlord, so it’s not necessarily fair to compare corporate studio rates with an english basement apartment. for this location, and if it’s really ‘updated’ and not just a basement with granite countertops, i’d say $1700, although you’d probably find people willing to pay more.

        to those pleading for consideration of what it ‘should’ cost and what it will go for: alas, these are pretty much the same thing. it is totally reasonable for landlords to charge what they can get for it. if you are determined to pass on your seller’s generosity, reasonable would be 15-1600. or, allow pets, flexible leases, offer to split your internet/cable, etc.

  • Updated 1 bedroom with outdoor space in that location? Minimum $1,800 PLUS utilities.

    You’ll have hundreds of applicants at that price and I don’t know how much of your time you want to spend wading through all those folks.

    • So don’t even advertise it. Already at least a couple people in this thread who were interested, and if you don’t want to have to wade through applicants I’m sure you could even just find someone who knows someone who is looking.

    • lindz0722

      Agreed with anon. Post it here. I have multiple friends who would definitely be interested at that price, who would love the chance to apply for a place like yours without competing with hundreds of other people.

  • Because its basement and small ish I think thats a great price. You could pay it forward and give another yuppie a chance to live downtown πŸ™‚ can always up later. Id be interested and I live around the corner in a studio similar price!

  • I know this comes up often, but how much does a ‘young professional’ need to make to think he/she can afford this unit if priced accordingly (~$2K/mo)?

    As a ‘young professional’ myself, two-years from earning a BS, in an entry level job on a government salary, I honestly think I may be part of a small minority that believes that sinking close to 60% of my net monthly income may be a bit too much for a place to live. This doesn’t include the complimenting premiums you pay for living in such a location.

    What sort of habits are my peers developing in thinking this may be a good idea?

    • lindz0722

      Being single, with no debt, I was okay with spending 40-50% of my income on rent

      • I’m in agreement-I’m single and have very little other debt and I’m comfortable paying about 50% of my take home income in rent. That equals out to about 38% of my gross income. If I needed a car or had other debt, I might feel otherwise, but I am able to live comfortably paying this amount.

        • Wow that sounds way too high. I pay about 20% of my income for rent, but the most I would do is 40%.

    • lindz0722

      Whoops, posted too soon. I was okay with spending 40-50% on rent for the first few years after graduation since I didn’t have any other debt. I work in the private sector, though. Someone on a nonprofit or an entry-level government salary, or someone with debt from college and/or credit cards, probably should not be spending that much.

      But — to each his own. Some people choose not to go out to dinner, movies, drinks, buy lots of new clothes, etc. If you don’t have many expenses there, you could definitely spend more on rent without putting yourself in a bad place financially.

      • I think a lot of young professionals come to DC thinking “I’m an adult now, and I have a good job, so I should have my own place. And that place ought to have a bedroom at least.” Which isn’t an unreasonable request, especially if they come from cheaper cities or have peers in other places that have graduated from group house living. But in DC that simple request costs a lot of money, especially if they’re nervous about living in gentrifying areas and decide to go with a pricier neighborhood that they know is safe (again, not unreasonable at all). If they don’t have a lot of student loan or credit card debt, and don’t need the latest fashions and gadgets, they might reason that they can get by with spending a lot on rent. And they probably can, and their young professional lives will probably be richer because they’re spending more on being in an interesting place than on material things. But most of them will get tired of not being able to save money or buy their own place and move after a few years. The lucky ones who tough it out might end up getting romantically involved with another professional, which will allow them to split housing costs and get the best of both worlds. πŸ™‚

    • I graduated college in 2005 and started working at a good job making $55k annually. Even as my salary increased over the years I never felt I was wealthy enough to afford a 1 bedroom or even a studio in a nice location. Most of the time I just suffered with horrible roommates. When I met my girlfriend (who makes six figures!) we knew we should start saving for a downpayment on a home to get out of the rental rat race. Nevertheless, the only way to do that was to live way out in the suburbs paying $1200/month and commuting 3 hours a day. And aside from an occasional vacation or dinner out we’re pretty frugal. I can’t image what people who make less must have to do to save money.

      Sometimes I think back to the people I started working with back in 2005, who were making as much as I do but renting 1 bedrooms for $1700-2000 a month. I think most of them got fed up and left DC eventually. It’s not really a sustainable practice, unless you’re ok with living paycheck-to-paycheck on a professional salary your whole life.

      • Thanks for providing a hopeful glimpse of my future self (minus the 6-fig girl part – not sure if I’m that lucky). I hope the frugality will pay off soon enough for the both of us. I’ve got no issue paying less than half of what this unit will end up renting for, swallowing my pride living with a few less-than-admirable roommates for now, and settling on a place in a few years when I have the cash needed to do so (which is unfortunately looking like north of $50K more and more everyday).

        • Believe me, I was in your situation not very long ago. It sucks being single and trying to save for a downpayment. Even though I effectively lost 3 years of my life living in the suburbs, I think it was worth it to become a homeowner paying less on mortgage now than my peers paid on rent (in a less desirable location no less) 8 years ago.

      • You and your girlfriend make $155,000+ a year (nearly $13,000 a month!) and you feel you can’t afford anything other than a $1200/month apartment that leaves you with a 3-hour commute to work? You guys are doing something seriously wrong with your finances. You honestly should consider seeking out the help of a financial adviser.

        • When we were trying to save up for a 20% downpayment for a house in DC (plus closing costs which were insane), then yes, that’s all we could afford. Don’t worry, we’re back to having high housing expenses with our mortgage now. πŸ™‚

        • God forbid someone who makes a lot of money should want to save some of it and not blow it all on rent!

          • Sounds like Jay is the one who needs a financial advisor…

          • “God forbid someone who makes a lot of money should want to save some of it and not blow it all on rent!”

            No, seriously, work with me here, folks. After taxes you’ve got $8,000 a month. Now surely there’s some intermediate option here between “spending $8000 a month in rent” and “being forced to take a 3 hour commute.”

            In fact, in this case, the solution is amazingly obvious! Spend $2000 a month in rent in the city, spend $2000 a month on all your other stuff (I know tons of people who manage to comfortably survive on much less than $24,000 a year of discretionary income.) But for this couple, they’d stilll have $4,000 a month left over, or savings of nearly $50,000 a year. There’s no reason at all to be “forced” into a 3 hour commute to save money in their situation. Yeah, DC’s expensive but a couple making $155,000 can easily hack it here. Let’s not lose our minds.

          • Jay, we needed over $100k for closing on our house, and didn’t want to be in rental limbo forever, so we had to save pretty aggressively. I don’t remember what her take-home pay is, but mine’s around $3600 since I also contribute to a 401k. $600 of that went towards rent, $1500 into savings, and $500 towards gas, utility bills, etc. I’m anti-suburbs too, but depending on what one’s priorities are I think it’s worth being slightly inconvenienced for a few years in order to save some money. Obviously we COULD HAVE lived in the city and spent a lot more on rent if we’d wanted to (we now live quite comfortably with a mortgage that’s three times as high), but that’s not where our priorities were at that time and I’m glad we didn’t. Hell, most of the people I work with live way outside the city, much further away than I did, and they are senior engineers who make a lot more than I do. I don’t think they’re mismanaging their finances– they just choose to spend their money on very different things.

            I think you mistook what I said as a complaint that we couldn’t afford to rent in the city, but I was just trying to assure the young professional above that it doesn’t have to be a hopeless situation if you’re willing to consider options other than mid-city apartments.

    • I have a friend who recently bemoaned over drinks that she pays $2,000 a month in rent on $3,000 in after-tax income! Sixty-six percent of her money on rent!

      She had an offer accepted on a condo that would have had a mortgage of $1700 a month (before the tax deduction!) but she couldn’t get approved for that high of a payment and so perversely was unable to lower her monthly housing costs thanks to policy allegedly aimed at preventing people from taking on more than they can handle!

      • in DC the rental market is mostly unregulated, in that most people don’t have to prove that they can afford a rental unit to move in (most just have to prove they have good credit).

        $1700 mortgage on $3000/month income is probably too high anyway, even assuming that the tax deduction offsets all the other expenses like condo fees, taxes, maintenance, etc.

      • I know it may sound tough, and in no way am I meaning to sound like a jerk, but the bank may have done her a favor.

        I know there are a lot of other variables missing (rate/term of loan, VA preference, down payment), but a $1,700/mo mortgage puts you in the ballpark for a $350K condo – a lot of house for someone with net earnings less than $40K.

      • That tax deduction is a big deal. It amounts to several hundred dollars off per month.

        I’m a homeowner and I enjoy this benefit but it’s sort of disgusting how people get screwed by renting with now tax benefit. Especially in modern day DC, where anything resembling affordability gets snapped up by vampiric developers and morphed into something only the newest richie rich can afford (and only at that point financed to the hilt).

        It’s frustrating as hell.

    • I’m a 24 year old IT consultant making just under $65k annually. After taxes/insurance/6% 401k contribution, my take home pay is ~$3600 per month. Have no debt and currently share a row house and spend between $1000-1100/mo on rent and utilities, save $1000-1200/mo and keep the rest as discretionary spending. I suppose if I were to reduce my savings and became more frugal in other aspects of my life, I could afford a $2000/mo place, but I have a hard time imagining that.

      • My salary is $12K higher but take home pay is nearly the same. WTF?

      • Now imagine you are 26 years old, just finished grad school and have $100k in debt. You just started a fairly entry-level job (2-3 yrs experience required) at a non-profit that pays $38-$42k a year and your take home pay is about $1600/month. You share a row house with 2 roommates and pay

        $900/month in rent and an additional
        $80 in utilities.
        $200 goes directly into savings (emergency fund) and another
        $250 is your student loan payment every month.

        Leaving you with $170 for food and transportation for the month.

        This city is unaffordable and the private, public and non-profit sectors are all extremely guilty of screwing over GenY and Millennials for years to come by continually trying to get educated labor on the cheap and taking advantage of the unemployed.

        Sorry, I just needed to rant. I think that if the person who wrote this post wants to “Give back” as she/he said – then $1450 + utilities is definitely a good way to do so.

        • Sorry, but lots of cities are close to unaffordable on 38k a year and 100k in student loan debt.

  • Are you going to manage it yourself, or use a management company? If using a management company, keep in mind they will take a percentage. I rent out my house in GA and my management company takes 10%, but considering how far away I am it is more than worth it for them to handle maintenance and other little things.

    If you’re intending to pass along the amazing deal you received, and $1450 pays your mortgage, taxes, and maintenance, then do that. You’ll have a ton of applicants (I’d be interested!). According to some of the other commenters, sounds like you could get more (but are these the same people who comment on how overpriced the POP listings posts are?).

    Ultimately, sounds like it’s a personal decision on whether you are trying to maximize profit (nothing wrong with that), or trying to pass along a deal that you feel fortunate to have received in the first place.

    But seriously, I’d be interested.

  • Hi Popville fam! Thanks for being so nice and keeping the bickering low (we tend to argue over nothing on here).

    I am happy/comfortable keeping it affordable, this conversation has persuaded me to raise it only $50. I think $1500 is still fair. “Arlusk” thanks for your insight, that is the type of Tenant I’m hoping to have.

    The place won’t be ready until Julyish. If you’re interested, feel free to email me at [email protected]. I suppose it just makes sense to have an open house in June and I’ll email the Popville folks that are interested πŸ™‚ Thanks again for all of your help!

    • OP, I think $1500 is more than fair and I think it’s awesome you want to pass along a good deal to someone else. I live a block from there and $1500 is definitely a fantastic deal, but not so low that I would think something was wrong with the place if I was looking! I think you’ll have your pick of tenants.

      Thanks for not just looking to make the most cash you can. It’s really pretty awesome.

    • That’s definitely the way to go. By freak of circumstance I’m currently renting out two 1 bedrooms right now, and by keeping the rent low, have been able to have 2 wonderful long term tenants that make my life much easier.

  • I consider myself super lucky. I guess my landlord is giving us the same good fortune you experienced. I think a lot of DC renters have too much disposable income. I can’t believe anyone would want to spend up to 50% of their income on a rental unit.

  • I’m curious what folks think is a reasonable rent for a 3 bed 1 bath rowhome in columbia heights? All the important things have been updated (roof, water heater, central AC/heat, new windows/doors, deck, parking, cute yard and front porch, new washer/dryer) and bath is updated but on the small side. kitchen is good size and totally functional but hasn’t been renovated (i.e. no stainless appliances or granite counters). i realize this might be poaching answers off the original post, so my apologies for that!

    • I hope folks don’t mind if I ask a similar question. We’re renting out a small furnished bedroom this summer and my wife feels like we should have asked for more. It’s in a very nice rowhouse with two living rooms, a dining room, a generously-sized kitchen, and two patios. One block from Eastern Market. The house has three bathrooms but only one has a shower so the tenant will be sharing it with us. The bedroom is tiny but it has a full bed, nightstand, dresser, shelving, and a small closet. And we’re not charging for utilities.

      • I would say $1000/month sounds about right, given the current market in that area. It sounds like a great house in a good location, but it sounds like a less-than-ideal living situation. (I’m sure you and your wife are fabulous people, but I’m not sure a lot of people would want to move in with an established couple they don’t know.) And, three people sharing one bathroom could get tricky.

        • Great, that’s exactly what we’re charging her. I think if we had another full bath we could charge more like my wife is thinking we should have (we looked into adding a shower in one of the other bathrooms but it would be difficult and expensive).

          • Will your wife resent the tenant because she felt she could’ve gotten more rent? I see your wife blurting out “we should be charging you more” the first time your wife things she’s hitting on you….LOL

          • Haha, I hope not! It’s a friend of a friend who needs a place to stay during her internship this summer. My wife and I discussed what we should charge, and collectively arrived at $1000 a month based on what we saw listed on Craigslist. But when the intern immediately agreed and offered to pay it all upfront my wife started wondering if we could have charged more. Anyway, it’s water under the bridge now, and besides, I don’t want the poor girl to be resentful of us if she finds out her coworkers are paying less for a similar place.

    • It Depends where in CH. If you look on CL, you will see that there are advertisements for a room-mate for 1K. On that level, you might be looking for 1K/bedroom. Or you might figure on ~1200-1400/bedroom – cost of utilities. Also depends on how new/updated/etc…

    • I would suggest around $3000 without utilities, $3300 with (water, gas, electric-add another couple hundred a month if you also include cable and internet). Of course, as stated above, it’s dependent on where in Columbia Heights the house is located. I do think having only one small bathroom brings down the price you can get a little bit, just because it’s obviously not ideal for three people to share one bathroom.

  • I’d say $1,600. I’ve been living in area since 2006 so feel I have good assessment on the area and rental market. $1,600 right price to be affordable to those and they are getting washer / dryer and outdoor space. You could get more, but if want to be nice and pass on a deal, then stay around this price.

  • Someone named Rose! I accidentally deleted your email, please forward. I wouldn’t want you to think I was ignoring you!!

  • I just wanted to say how cool as s*** the OP seems. How awesome of you to pass along your good fortune, when you certainly don’t have to! Righteous.

    • I moved her w/student debt @23, no help from the parents and felt defeated. Everyone I knew had so much assistance from their rich parents or fairy God mother. I felt like there was no hope for regular girl from down south. My ex landlord SAVED my soon to be homeless butt but choosing me as a tenanat! I know how it feels

      • I had somebody like this too– rented to me even though they certainly had better offers (on paper). Good on you for repeating the favor!

  • I would say rent it for market rate. If you want to be fair and pay it forward- then just be a great landlord and then consider NOT raising the rent for the tenant during there stay. That extra money is money that can help expand your portfolio or towards your future living situation.

    I rented my basement out at market rate and I only raised the rent after the first year. I had the same tenant for 7 years. Whom were able to save and recently bought a house. To me that is paying it forward.

    • I did this for my tenants ($1500/month ~800 sqft + 180 sqft patio), but soft of feel that I should have raised rates at 1/2 market value every year. After 8 years, they are moving out in may & current market rates are at about $2,200+/month. Functionally, this means that the eight years of exicellent tenancy savings are probably equal to the difference between market & what they paid in the last two years…

    • Yes to this.

      I get the sentiment, OP, but if this is your first time as a landlord, you have to realize that you are entering a long-term contract with a person who is, essentially, a stranger. The amount of due diligence you can reasonably do is not enough to guarantee that you will land that great tenant to whom you wish to pay forward the good mojo.

      I’ve been a landlord in DC for the better part of 10 years. I’ve always priced my units at what I thought was slightly below market on the idea that I’d rather draw from a deeper pool of potential tenants. What I’ve come to learn is that my “Spidey sense” about prospective tenants is good, but not infallible. 85% of my tenants have been great. But the bad ones … well, you’re realistically not going to be able to get them out easily, and they probably know they’ve got a good deal from which they don’t want to walk away. The better the deal, the less likely they’ll abandon it. You may be stuck in a bad situation much longer than you want if you’re TOO kind with the rent.

      The strategy here is a winner. Once you have a truly great tenant, never, ever move their rent up a cent. Go above and beyond on responding to service requests and gratuitous upgrades/improvements to their home. Think about whether providing HBO with the cable or faster internet (all of which are deductible to you, but not to them) will keep them there longer. But do all that AFTER they’ve given you reasons to believe in them as good tenants, not on the assumption that doing it first will guarantee you good tenants.

      • This sounds like great advice. Run it like you would if you were running any other sort of business in DC. Do you sell yourself short with Groupon promotions, attracting customers that are just looking for a deal, or do you offer a quality product at an appropriate price and reward the customers that are loyal?

  • It’s low, you’re looking at $1600+ for a small 1 bed in that area. You could always ask for more and lower the rent for the right tenant/long term lease.

  • It may depend on how nice the outdoor space is. Frankly, I think rats would be a major issue with any ground floor outdoor space on U Street.

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