Are You Undercharging Rent? How to Know — and What to Do About It
If you’re a landlord or rental property owner, one of the most overlooked ways to grow your income is by simply making sure your rent is priced correctly. Many landlords assume their rate is fair — especially if their tenants seem happy or renew each year. But undercharging rent is more common than you might think, and it can quietly cost you thousands of dollars annually. In this post, we’ll explore how to tell if your rent is too low, the most common mistakes landlords make when setting rent, and what you can do about it.
Why Rent Pricing Deserves a Second Look
Rent isn't just a number — it’s the engine of your investment. A few extra dollars each month can compound into serious returns over time. If you’re undercharging by $150/month, that’s $1,800 a year — per property. Across multiple properties, this becomes a significant loss in potential income that could have gone toward upgrades, reserves, or scaling your portfolio.
Rent pricing also plays a huge role in:
Determining the value of your property (especially if you're planning to refinance or sell)
Attracting and retaining quality tenants
Funding future improvements and avoiding deferred maintenance
Staying competitive in a dynamic market
Signs You Might Be Charging Too Little
Many landlords don’t realize their rent is below market value until they stumble across a higher-priced listing for a similar unit — or worse, until a tenant breaks lease and they try to re-rent it. Here are some clear signs you may be undercharging:
Your property rents instantly.
If your rental gets snapped up within 24–48 hours of being listed with no negotiation, it may be priced too low. A quick lease-up is good, but it could also signal that the unit was underpriced for the current market.You haven’t increased rent in years.
If you’ve kept rent the same for 2–3+ years, chances are the market has moved without you. Inflation, rising costs, and increased demand all influence rental value.Other units nearby rent for more.
Look around your neighborhood or building. Are other, similar units getting $100–$300 more? If so, you might be losing out.Tenants never question rent increases.
If your tenants accept every rent increase without question or always renew enthusiastically, it may be because they know they’re getting a good deal — possibly too good.
Common Mistakes Landlords Make When Setting Rent
It’s easy to make assumptions about pricing that don’t align with the real rental market. Here are some of the most frequent missteps:
Pricing based on your mortgage.
It’s tempting to use your monthly mortgage as a rent baseline — but your rent should be based on market value, not what you owe. Renters don’t care about your loan terms; they care about what comparable units cost.Ignoring upgrades and amenities.
If you’ve made improvements (new appliances, flooring, smart home features, or even curb appeal upgrades), those should be reflected in the rent. Too many landlords improve a unit but leave rent unchanged.Forgetting to factor in demand.
Even if your property hasn’t changed, the neighborhood might have. New employers, restaurants, schools, or transit options can all push rents up.Relying on outdated comps.
Rental markets shift rapidly. A comp from 18 months ago may no longer be accurate. Always use the most recent data available and adjust for size, features, and condition.How to Confidently Reevaluate Your Rent
If you're unsure whether you're charging the right amount, here are a few steps you can take to get a clearer picture:
Review local listings. Check current prices for similar rentals on Zillow, Apartments.com, Craigslist, and Facebook Marketplace. Focus on the same zip code, square footage, number of bedrooms/bathrooms, and amenities.
Track your listing performance. When you advertise a vacancy, watch how long it takes to get interest. Too fast? Might be underpriced. No inquiries after a week? Possibly too high.
Talk to local property managers or investor groups. They often have up-to-date rental benchmarks and insight into local demand trends.
Compare your property features to others. Take note of things like in-unit laundry, off-street parking, central air, walkability, pet policies, or recent renovations. These all affect value.
What to Do If You’re Undercharging
If your rent is indeed below market, raising it might feel uncomfortable — especially if you’ve had the same tenants for years. But it’s possible to course-correct without causing turnover or conflict. Here’s how:
Start small and be consistent. Instead of a big jump, raise rent incrementally each lease cycle. Many landlords increase rent by 2–5% annually — a pace that most tenants expect.
Give proper notice and communicate clearly. Check your local and state laws for required notice periods. Frame the increase in terms of rising costs, property upgrades, or market changes.
Reinvest in the property. If you’re increasing rent, consider adding a small improvement (new faucet, better lighting, landscaping refresh) to help tenants feel the value.
Stay proactive. Regularly assess your rent annually, even if you don’t have turnover. It’s easier to stay at market rate than to play catch-up later.
Want Help Figuring It Out?
Underpricing rent is one of the most common — and costly — mistakes landlords make. But it’s also one of the easiest to fix with the right data. If you want a free, fast, and data-backed estimate of what your rental should be priced at, we’ve built a tool that delivers results in less than 24 hours — no logins, no upsells.
