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Rules for pricing a rental property

Putting a rental price on a home is not an easy task. This is mainly due to the fact that it is a necessity for the owner to obtain a good return as well as find the best tenants. Therefore, before facing such a task, it is important to follow a set of rules and stick with them. 

The first thing to take into account when establishing the right rental price is the location of the property and its nearest municipality. In fact, according to various studies, this can account for 40 per cent of the total value. As a general rule, homes located closer to historic centres tend to be significantly more expensive than those in the suburbs. And in this sense, most tenants pay more attention to the location rather than the actual condition of the house.

It is worth emphasising that in many cases, the prices can vary ostensibly within the same district or neighbourhood. This is especially evident in coastal resorts. The value of a beach-front house can be between 15 and 20 per cent more than another property that has been built just 100 metres away from the sea.

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The spaciousness of the building is another important factor. So much so that it can count towards approx. 30 per cent of the total rental price. To this we must add other factors such as a leeway to lower the price in order to find the perfect tenant. It is estimated that the monthly rental price of a totally renovated house is 10 per cent higher than the one that's in disrepair.

On the other hand, homes with balconies or terraces are always more expensive than those without outdoor premises since tenants usually give a great importance to natural light. Also, high-rise apartments are just as popular with tenants. In fact, the higher, the better, especially if the property has good views. For example, an attic apartment can cost 10 per cent more than a similar property on the lower floor of the building.

Finally, additional services and amenities that are within the property's proximity must also be taken into account. In this sense, garage, pool, porter and lift are the four elements that can add between 5 and 10 per cent to the monthly rental price. In any case, if you want to rent out your property as soon as possible, it is always advisable to price it slightly below average.

Engel & Völkers

Génova, 27 - 5th floor
28004 Madrid
+34 91 277 45 00

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