I'm going to start renting studio space to other instructors and was trying to figure out a good rental rate. Do any of you guys rent space out or rent space?
Is it hourly - Ex. $5.00 per hour
Or based on the tuition charged by the instructor - Ex. 10%
Do you know of any resources that can help me out with this?

Call up larger music stores and ask what they charge. (Pretend you're a potential renter!)

Thanks! That's a great idea, I will definitely do that.

Some music stores in this area would charge per half hour lesson given. I used to teach at a music store, and they charged me $2 per half hour lesson, so I increased my rates by $2. But I was literally in a closet in a basement with no windows. It drove me nuts.

Anyways, another option is to simply figure out what you pay for the entire space (rent or mortgage) and then divide that by the square footage of the entire space, then multiply that by the square footage of the area being rented out. So if you pay $1000/month in rent or mortgage on a 1000 sq. ft. space, and 200 sq. ft. would be rented out, then you should get $200/month rent on it. You also may want to factor in utilities, cleaning and other maintenance costs. Also compare to what they would pay if they rented their own place. Once you get all of this information, you'll have a better idea of what to charge.