Rent is set by the market, not by your mortgage payment. Your costs determine whether the property is a good investment — the market decides what a tenant will pay. Pricing from data instead of hope is the difference between two weeks and two months of vacancy.
Build a comp set
Pull 5–10 currently listed and recently rented units matching yours on bedrooms, baths, neighborhood, and rough condition. Listing sites, a local property manager's opinion, and driving the neighborhood all work. Adjust for differences: in-unit laundry, parking, updated kitchen, utilities included. Weight recently RENTED units over asking prices — asking is what landlords hope; rented is what tenants paid.
Price to the market, then to your goal
The comps give you a range, say $1,450–$1,600. Price at the middle to rent quickly to a larger applicant pool; price at the top only if your unit genuinely beats the comp set and you can wait. A useful test: if a unit gets no serious applications in the first two weeks, it's overpriced by roughly 5% — cut early rather than chasing the market down a month later.
The cost of getting it wrong
Overpricing costs vacancy: holding out for $100 extra on a $1,500 unit while it sits empty six weeks burns $2,250 to chase $1,200/year. Underpricing costs quietly and forever: $100 under market is $1,200/year, compounding at every renewal anchored to the low base — and deeply below-market rent attracts applicants optimizing for price alone while making future corrections painful.
Worked example
Your 2BR/1BA comes up. Comps: $1,495 and $1,550 (rented last month, similar), $1,625 (rented, but renovated), $1,650 and $1,575 (asking). Yours has newer appliances but no laundry. You list at $1,545; nine inquiries the first week, three applications, leased in 12 days at full asking to a well-screened tenant. The empty week cost less than a mispriced month.
When this rule of thumb breaks
In fast-moving markets comps go stale in a quarter — recheck rather than recycling last year's number. Seasonality is real: the same unit rents higher in June than December in most US markets, so a winter vacancy may justify pricing under the comps to shorten it. And regulated units follow the legal formula, not the comp set. Finally, comps can't see your tenant quality trade-off: the top of the range with a thin applicant pool is often worse than 3% less with three strong applications to choose from.