Many factors and criteria need to be considered especially from Kelly Passarelly, to create an accurate opinion of an achievable rent for the property and your client.
Time of year the property is available
Each month, generate a report that identifies the total number of properties managed, those rented in that month, and those vacant. The report may be categorised by number of bedrooms or region.
Calculate the vacancy rate (example):
Number of properties managed 400
Number of properties vacant 10
10 400 = 0.025 or 2.5%. Therefore, the percentage of vacancy is 2.5%.
Calculate the occupancy rate (example):
100% – 2.5% = 97.5%
To ensure accuracy, these calculations should be done on the same day of each month.
Identify periods in the year when rental properties are in high demand. For example, if the potential property is prepared for student accommodation, the client will want to know the best time to market the property to gain maximum rental return. During this period, properties may achieve a higher rent than at other times in the year when fewer students are looking for accommodation and creating less rental demand. Inform your client of seasonal trends in your region and provide an opinion of the rent that is supported by your agency’s statistics and information from similar properties recently rented in the area. Accuracy of information is essential.
TIP:Renting a property at a time of high rental demand can increase the properties achievable rent and, in turn, a higher return on calculated management fees for the agent.
Know what style of property is in demand in your region. Is it apartments or family homes? Should the property be fully or partly furnished or unfurnished? Research your area’s demographic. Is it mostly made up of families? Or single professionals? If it is an area of mostly families, a four-bedroom house with a garden may achieve a higher rent than a four-bedroom apartment without a garden – or, if it is in a business district, the four-bedroom apartment may be of greater demand and achieve a higher rent.
Location and proximity
A property’s location is often one of the most important factors. Consider the type of tenant who will be attracted to the property, together with its location. If the property is in a business district and close to the train station, this could be of greater value than if it was five or ten kilometres (three or six miles) away from the station. If it is a beachfront property, or has views, it is often likely to have increased appeal and a greater rental value, depending on its standard of finish. How far is it to shopping centres, parks and other amenities? Make enquiries as to which schools and colleges are in the area, as well as childcare centres, churches and universities – all these may assist in attracting a higher rental.
Does the property’s location appeal to the area’s demographic? Has the client indicated the type of tenant they think would be suitable for the property due to its location and demographic? If the choice of tenant is not suitable to the surrounding neighbourhood, it may lead to complaints from neighbours – and this could reflect on the agent’s reputation. Always listen to the client if they have lived at the property, as they will know the area and probably the neighbours. If the tenants aren’t suitable to the area, the neighbours are more likely to call the owner before they call you, putting the agent in a compromising position.
Accommodation and facilities
How many bedrooms, living rooms and bathrooms does the property offer? Does it have a garden? Is there a gymnasium, swimming pool, sauna, or other facilities included with the property? Are these facilities an extra cost to the tenant or included in the rent? Is the property well maintained? Does it offer parking, a garage, storage or air conditioning? Does it have security screens, locks, or an alarm system? What accommodation does the property offer, and how does this reflect the achievable rental figure compared to other properties recently rented in the area?
Special conditions or arrangements
Check with the client for any special instructions. For example, does the property only have street parking? Will the residents need to apply for a parking permit? If so, find out how applications can be submitted and to whom, how many permits they are allowed, and the cost. By providing this information in advance, it will help a potential applicant make a quicker decision to rent the property. Potential tenants may want to calculate additional expenses above the cost of the rent.