What should the rental price of your apartment be based on?23 Jun 2014 | Renting FAQ
Benarroch real estate, through Peace of Mind Rentals – our specialized service aimed at property owners, recommends you to take into account the following parameters when setting the rental price for a long term rental of your property. By applying these criteria you will be able to obtain what we call the technical price of your home.
On the Market
The main point of reference to be considered is the situation of the market. Knowing the current prices and the average price that can be set for a home of your characteristics are concepts that have to assimilated before establishing such price, so what we recommend is to never put your economic needs before the reality of the market.
On the Neighbourhood
The whereabouts of your property are another factor that will determine its possible range of prices. The value of a property depends on its location; for example, the value of a home set on a beach road in Marbella will be different from that of a home set on a mountain road, and by road we mean the National Highway 340 which crosses the town.
On the condition of your property
A freshly painted or refurbished property will always have a higher value. Also, as a further improvement, you can always depersonalize it by removing all personal items, making it shine, cleaning it thoroughly or reordering it and leaving only the essential – a procedure which we call “home staging”.
On the competition
Homes located in neighbourhoods with a large volume of similar available properties will have to adjust their prices much more than in the case of a scarce supply. The supply is therefore a determining factor in such situations.
The reality is that if you set a price which is higher than the technical price, then it will take you an average of 81 days to find a tenant, and what will happen, as shown in the first chart, is that you will rent your property for short periods of time separated by long intervals when the home will be empty or occupied by a potential non-paying tenant, while with a price based on the technical price you will make sure that your property is rented much faster (in approximately 15 days) and that the tenant remains as long as possible, guaranteeing the payment of the rent and thus maximizing profitability.
A service specialising in the RENTAL OF PROPERTIES |created by Benarroch real estate and aimed at property owners.
Article by Brice Benarroch Mennessons23 Jun 2014