Have you just invested in a property that you would like to rent out, but don’t know how to set the rent? Good news: BuyerSide is here to advise you and help you maximise your rental income!
Establish the criteria that define your property
To set your rent correctly, you have to take account of all the criteria that characterise your property. These objective elements form the basis for the level of your rent:
The value of your property changes depending on its geographic location. A city-centre apartment will necessarily be more expensive than the same apartment in the middle of the countryside.
2.The surface area of the property
This is obvious: your rent must be in proportion to the number of square meters and rooms in the home.
As the amount of light and the view improve as you go up, the price of an apartment can vary depending on the storey it is on. But note that this ratio also differs depending on the equipment in the building. So in a building without a lift, the apartment on the top floor is usually less expensive.
4.The general condition and standing
The general condition of the building and its façade, the materials used for renovations, the condition of the communal areas, the equipment, etc.: all these elements have to be taken into account when setting the amount of your rent.
A well-oriented terrace or a garden are increasingly sought after and can certainly put up the rental value of your property.
If your rent includes a parking place or a garage, you have to take this into account. In this case, you can add between € 100 and € 150 per month.
7.Furnished or not
It is important to realise that putting up a furnished home for rent implies a risk of higher tenant rotation, as this type of rental meets the demand of tenants in search of short stays (+/- 1 year). As a result, the owner has to undertake more management (rental costs, visits, contracts, guarantees, meter reading, etc.). Not to mention the need to replace the furniture in the medium term and the tax due on the part of the rent relating to the furniture. So this type of rental is usually more expensive. In this case, you can increase the rent by around 20 to 30 %.
A well-insulated property enables the tenants to bring down their energy bill. Thanks to this criterion, you could consider a slight increase in the rent. But take care that this does not totally erase the amount saved by the tenant.
Compare with other rented properties
Once the list of criteria has been drawn up, the best way to set a fair rent is to compare your property with other similar housing. This will give you an approximate idea of the market price and how much your property may be worth. You can also consult statistics prepared by the communes to help you, or even ask your neighbours to put up their rent.
A good rent is not necessarily a high rent
Although it may be tempting to set a high rent, this is not necessarily a good idea. In fact, an overly high rent compared with similar properties prompts tenants to leave as soon as possible. So you risk having vacant periods between two leases that can prove costly. This is why it is preferable to suggest a rent that is appropriate or slightly below the market to encourage your tenant to remain.