What determines how much rent a landlord can charge?

The amount of rent a landlord can charge is primarily influenced by market demand and supply. This concept stems from the economic principle that prices are driven by the balance between how many individuals want to rent properties (demand) and how many rental properties are available (supply).

When demand for rentals in a specific area increases—perhaps due to population growth or a desirable neighborhood— landlords may raise rents because they can attract tenants willing to pay more. Conversely, if there is an oversupply of rental units in comparison to the demand, landlords may need to lower rents to attract tenants. This interaction ensures that rental rates reflect the current market conditions rather than being strictly tied to factors like the landlord's original purchase price, the number of apartments in a building, or the building's age, all of which can influence rental decisions but do not directly determine pricing on their own. Consequently, understanding market dynamics is essential for both landlords and tenants in navigating rental pricing effectively.