What I try to do is compare the item with existing Magic Items and see what it's most similar to.
When doing so, pay attention to the attunement requirement. If you have two items that do the same thing, one that requires attunement and one that doesn't, the one that doesn't probably is one level of rarity higher, because it can be really valuable to not have it count towards your limited attunement slots.
It's very much an eyeball thing; the table in DMG gives some guidelines, but for all practical purposes rarity is just meant to inform when an item is intended to enter the game and as a corollary what kind of price tag it should have. I don't think there's any in-game mechanics that check rarity to take into consideration.
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The DMG doesnt do a good job explaining this in my opinion, this Reddit thread is a bit better, but is there an official (or widely accepted) answer?
Do you mean for homebrew items?
Yes
I don't think there are any good instructions.
What I try to do is compare the item with existing Magic Items and see what it's most similar to.
When doing so, pay attention to the attunement requirement. If you have two items that do the same thing, one that requires attunement and one that doesn't, the one that doesn't probably is one level of rarity higher, because it can be really valuable to not have it count towards your limited attunement slots.
It's very much an eyeball thing; the table in DMG gives some guidelines, but for all practical purposes rarity is just meant to inform when an item is intended to enter the game and as a corollary what kind of price tag it should have. I don't think there's any in-game mechanics that check rarity to take into consideration.