How to decide the rental price of a property

Assigning a rental value to a home, office or premises that does not correspond to the market implies risks such as reducing profitability, delaying the closing of a business or worse, never getting a customer. Hence, the importance of this task for which will prepare the following guide.

The ideal is to hire the services of a professional appraiser to determine the rental price and obtain advice on the matter. However, if the owners decide to do it on their own, they must follow the following steps (knowing in advance that by law the canon should not be greater than 1 percent of the commercial price of the house and that in other types of properties there is no stop).

1. Make a form in which you list these data (apply those that correspond to your property)

  • Property type
  • Vetustez (years of construction)
  • Area
  • Stratum
  • The floor where it is
  • Number of bathrooms
  • Number of parking spaces
  • Smart building (offices)
  • Height (cellar)
  • Number of phone lines
  • Conservation status *: a. Excellent, b. Well, c. Regular, d. Bad, e. Terrible (See detail in the footer)
  • Lease price
  • Observations

2. Call to find out about the properties that are for rent in the same area as yours. Ask for all the information on your return and write them carefully.

3. For this task, take into account the properties to which notices are posted on the windows, also those that are published in newspaper classifieds and on and, as far as possible, those that are consigned in a real estate.

4. For your circle to be the closest to reality, the sample taken should not be less than 20 properties.

5. Next, start sorting the properties and select those that have the most similar characteristics to yours.

6. Divide the price of each one by its area and you will get the value per square meter.

7. Then add the prices obtained and divide them by the number of properties used in this exercise.

8. The result obtained will serve as a reference to decide the rental price of your property.

However, the value obtained does not necessarily have to be the one initially requested, since it is important to have a negotiation margin. It is recommended, then, that the base price is 10 above what is expected.

The value of the insurance that may be applicable, in the event that you decide to use them, are additional to the rental value of the property and as such must be clearly specified in the respective contract.

Keep in mind that if you want to lease your property to a bank, government or multinational entity, among others, they may require a professional appraisal, which determines for sure the replacement value and the real -current- price of the good you want. To lease. Professional appraisers take into account all the circumstances that may affect the property such as life span, physical deterioration, and the purpose of the appraisal.

State of conservation of a property. How to rate it?

To. Excellent: Like new. It does not need repairs; paint, bathrooms, floors, kitchen, closets and finishes are in perfect condition.

b. Good: Although it does not require remodelling, minor repairs should be made in paint, electrical outlets, switches, bathrooms, flooring, or other finishes.

c. Fair: Habitable, but requires major repairs to panelling and paint, floors, closets, and/or kitchens.

d. Bad: Not immediately habitable. You have problems with humidity, leaks and the functioning of bathrooms, kitchens and/or laundry rooms.

And. Terrible: Not habitable. Repairs of all kinds must be made: structure, humidity, leaks, networks and/or utility connections.