Hi,

I am looking for info about determining rent to charge.

I have recently purchased a house that has a 2 bedroom apartment. I plan to live in the other part of the house. I found census (Maine State Housing Authority) data that showed the average rent for a 2 bedroom in my area to be $635. It seemed kind of steep (rural area) but I don't know. This is my first time as a landlord.

Also, because there is only one furnace to heat the house, heat would probably be included. Is it feasible to have some sort of clause in the lease or agreement that prorates the heating fee if the price of fuel oil exceeds some set maximum? There are also meters on the circulators, one for the apartment and one for the house, could they be used to divide the utility cost if heat was not included in the rent?

Any advice would be greatly appreciated.

Thank you.

I can say that you can charge whatever you want for rent, and you could put into consideration what the average cost would be for the increase in electricity, if it is included in the rent. I know that I rented a place from a man who lived in the same building as I, and electricity was included, this is a rarety, so I jumped at the rental opportunity. You will get reimbursed for the electric used, but I am just telling you, that you would have alot more people interested, and they may even stay there longer because of that being offered. You could always state that the rent you are charging is based on an assumption of the electricity bill, but if the tenant uses way more electric then you thought (by keeping things on, since they don't have to worry about the bill), that the rent could go up, if this happens. Good luck to you!

I see that heating fuel is the only thing here, not electricity, but just the same, it is a good fringe benefit for renting from you.

Check in the newspaper or trade magazines for other apartments or houses in your area to determine your market rate. Estimate the average usage of heat and add 10%. This will help in the event that the tenant is wasteful with the heat. I would start out with a monthly agreement. It will help you in the event you have to evict due to tenant being a jerk or refusing to meet his or her obligations. If they insist on a lease agreement, then tell them that in 6 months you will reconsider.