Published on : 06 May 20193 min reading time
It is not always easy to set the amount of rent that is just as much for you as it is for future tenants. From this calculation will depend on a good profitability of your hiring and especially a certain ease in your search for tenants. Here’s how to calculate the amount of a rent at the right price.
Fix a rent: evaluate the housing
Calculating an amount that is right compared to the housing you rent will ensure you find a tenant faster and your home does not stay empty. To evaluate your accommodation, you will have to take into account the same criteria as a real estate agent, namely the most and the least of the property you rent:
- Geographical location: depending on the situation and amenities around, the price per m2 is not the same.
- The living space: it corresponds to the floor area that you can find on your notarial deed in most cases.
- Domestic benefits: the condition of your home or the fact that it is furnished or not are essential criteria to take into account, which will play in favor of the amount of rent and allow you to stand out from the rest of the offers.
- External services: an elevator, a guard, an intercom or a secure subdivision are all criteria that bring value to the property and which affect the amount of rent.
- The level of energy performance: energy consumption is also a criterion that is becoming increasingly important to tenants.
Compare with market offers to determine the amount of rent
The comparison with other goods available at the same time as yours will allow you to get an objective idea of what is possible. Keep an eye on real estate listings to find out the state of the rental market in your city.
For a fair comparison, try to find properties similar to yours, including:
- the geographic location ;
- the living space;
- The quality of the property.
Evaluate the amount of rent by calculating the gross rate of return
Once you have a clear idea of the amount of rent, it is also worthwhile to calculate your rental yield and determine a fair rent that takes into account the previous criteria and the gross rate of return.
The calculation of a rental yield comes in the case where you still have a mortgage to repay on the housing in question. The goal is that the amount of rent is as close as it costs you to repay the loan monthly. The more the rent is close to your monthly expenses, the more the investment is interesting.
To calculate your performance, you must:
- calculate the annual amount of rent;
- divide this amount by the price of housing;
- Multiply the result by 100 to obtain a percentage.
Annual gross profitability, which includes expenses and other taxes, unlike net profitability, is already a good indicator of your threshold so you do not lose money.