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Rules for valuing a rental property

It is not always easy to put a price on rental properties. Every owner wants to find the perfect tenants who can take care of their house but they do not know how much rent they should ask for. After all, they think "what is the most reasonable price for renting my house?". You have to think of a specific figure that will be worth your while so the best thing to do is to establish what the actual or approximate rental value is.

In reality, there are no rules, but there are factors that must be analysed with regards to the area where the apartment or house is, its location, the nearest metro and its proximity, and so on.

One decisive factor that must be taken into account is the area where the property is located at. In fact, if the area is central, its rental value can be increased by up to 40%. People who want to rent in Madrid seek utmost comfort and prefer to look for a property that is in the centre of the city, even if the subject property is in worse condition than the one outside town.



Madrid - alquilar-casa-madrid.jpg

In any case, it is still possible for rental prices in the same neighbourhood to differ significantly between properties. Before renting in Madrid, it is highly essential to check the location and look for information on house prices that have similar characteristics and are located in the same area. This way, the owner can get an idea about the average market price.

Another determining factor is related to the size and condition of the property. Square metres have a lot of influence when it comes to setting a price. According to statistics, no less than 30% of the total price is related to size.

Aside from the size, the condition of the property is another decisive factor. "Rent my house for the same price as the rest", wrong! Lowering or raising the price will depend on its current state. The rental price of renovated properties can be raised by approximately 10% just by refitting pipes or flooring. If, on the other hand, the property is in disrepair, then the rental price will have to be lowered by at least 3%.

The apartment and its views are also variables that have to be taken into account. After all, a top floor attic-style apartment does not have the same value as the other flats in the same building. Secondly, you also have to look at other additional services of the apartment, such as the garage, 24-hour doorman, lift, or pool, all of which can increase its value from 5 to 10%.

Either way, every owner can set whatever price he sees fit. What is clear is that in order to rent out a property quickly, the most convenient way is to lower the price a little compared to the average value.

Engel & Völkers

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

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