How to price a room, not a house

Pricing a whole house is comparison: look at what similar properties are asking, position yourself among them, adjust. Pricing rooms individually does not work that way, because the market gives you one number for the property and you have to divide it between rooms that are genuinely unequal.

Start from the cost floor

Before you look at anybody else’s listing, work out what the property must earn in total: mortgage, rates, insurance, utilities if you are covering them, and a maintenance provision that is a real number rather than an act of optimism. Divide it across the lettable rooms. That is your floor.

Any market-led price below the floor is a slow leak, and slow leaks are hard to notice in property because the loss arrives as an absence rather than a bill.

Adjust on differences that are real

Once you have the floor, distribute the premium across rooms on differences a prospective tenant will actually perceive at the inspection.

• Size and natural light. A sunny double is not the same product as a small interior single, and pricing them alike leaves money on one and vacancy on the other.
• Bathroom access. An ensuite is the single largest premium in shared housing, by some distance.
• Floor level, street noise, and how close the room sits to the kitchen and the shared bathroom.
• Storage, a desk, a built-in wardrobe, a balcony — each worth a few dollars, and worth listing explicitly.

Decide what is included, then be precise about it

Bills-included pricing is simpler for tenants and removes an entire category of household argument, but it moves the usage risk onto you. If you bundle utilities, build a realistic per-resident figure into the rent from last year’s actual bills, and revisit it each season rather than each lease.

A room priced ten dollars too high sits empty for three weeks. That vacancy costs more than a year of pricing it correctly.

Reprice at turnover, not on the calendar

A vacancy is the only moment you can reprice a room without disrupting somebody who lives there. Use it — check the floor, check what comparable rooms are actually letting for rather than asking, and set the new figure before you photograph the room.