How to calculate rent for your property?
If you are looking for an apartment for rent or just any sort of rental property, here’s how to know if you’re being quoted right. If you are standing on the other side of it, where you are giving out your property for rent and expecting quality tenants, here’s how you can come to the middle ground on pricing.
Method 1: Calculate the market value of your property
First, understand what your house is worth currently and then you can calculate 2.5% or even 3.5% of the property value. This is what you can consider the rental value and further charge the rent on. But, hold on there are other factors that you need to take into account before you just go onto finalizing this.
Ex: If your property is worth Rs 75,00,000 then 75,00,000 * .025 = 1,87,500
If the rental value is Rs 1,87,500 then the rent will be 1,87,500 / 12 = Rs 15,625 per month
1.The location of the property
Where your property is located, has a major bearing on the cost. The cost of an acre of land in the countryside may be of the same as the rental value of a 3 BHK in the city. A house with well-maintained roads, electricity and water, 20 KMS away from the city would be at least 20% lesser than exactly the same amenities, in the city. But if away from the also means closer to the airport with great accessibility for schools and hospitals, it is a great hike in the value of the property.
2.Infrastructure and accessibility
Is the property located in a prime residential area with schools, grocery stores and hospitals around, maybe even with a mall nearby? The rental value shoots up easily. If it is still a budding area with mere roads or connecting flyovers, you could keep your numbers close to what you had arrived at, while calculating the rental value.
Method 2: The “Looking up”
Just type in “Homes for rent near me” or “Rental property near me” and find properties that match yours, in terms of number of bedrooms, square foot, number of bathrooms and other amenities. This is for the non-overthinkers and let’s just go with the flow, type of people.
Method 3: The calculation per square foot
You can calculate the rental value based on square feet. Suppose it is a 3 bedroom house with 1500 Sq Ft of built-up area and there’s a 2 bedroom house nearby with 1000 Sq Ft, renting it out for Rs 12,000 per month, the calculation would be Rs 12,000 / 1000 ft = Rs 12 per sq Ft.
So this would mean that the 3 bedroom property that is 1500 Sq Ft, will be 1500 * 12 = Rs 18,000 per month.
This is usually found accurate if taking reference of a place that is nearby, as the factors that count in for rental value are considered.
Whatever said and done, here are a few things that decide how desirable your property is:
- The feeling of spaciousness – Anyday a single bedroom apartment that is 700 Sq Ft is more desirable than a 2 bedroom house that is 600 Sq Ft. The way a house looks spacious can really add to the way its value is perceived.
- Floors, if it applies – An apartment or even in a house on the 3rd floor, you can charge as much as the value of the place considering there’s a working elevator and doesn’t go in for repair often.
- Storage availability – A house with more space done for storage in the rooms, the attic and the kitchen, looks more practical and desirable.
We hope this article can help you decide what’s best for your property. We are a leading real estate agency in Bangalore and our experts can guide you take more informed decisions. Get in touch with us for property matters.