Currently, more and more people are turning to real estate investment. Whether it is a rental apartment or a seasonal rental, this project is very profitable in the long term. Indeed, today, students, young couples, and workers choose to settle in the city to be close to schools and their work. This is why the real estate sector has more demand than supply, especially in certain regions. Despite this, investing in real estate is not a trivial project. Several parameters must be taken into account, in particular profitability. Will the rent you set be enough to pay back your investment? How to determine the ideal amount?
How to Set the Rent?
Real estate investment is a reliable and fruitful project, provided you find a good location. Moreover, most banks and credit organizations currently offer real estate loans to individuals. They are accessible to everyone, and the rates are low. In addition, retired people also choose to rent part of their residence to earn additional income. However, whether it is for an apartment or a vacation home, owners are all faced with the same problem: how to determine the amount of rent? Indeed, if it is too high, you risk not finding a tenant. So how do you go about it? It depends on several criteria.
Calculate According to the Expected Profitability
If you plan to invest in real estate and rent out the property you have just bought, you must first study the project to define its profitability. Indeed, most of the time, the monthly rents will be used to pay back the contracted loan. In addition, there are various expenses (taxes, etc.). A part of the amount received must also be put aside for possible repairs. Although landlords have the option of requiring a deposit from the tenant, the amount requested is often not sufficient to pay for repairs. To help you, you can consult sites on the Internet indicating the current real estate market rate according to the region. You can then refer to the result to get an approximate amount of rent to set. Indeed, if you overestimate the rent, you risk not finding a tenant. And if tenants realize that your house has been advertised for some time, they will tend to be suspicious.
Estimate According to the Geographical Location of Your Home
Geographic location is a very influential factor in real estate. Whether it’s a rental property or a property for sale, it is the first point that interests customers. The closer the property is to strategic areas (shops, schools, public transport, etc.), the higher the price (purchase or rental).
Calculate According to the Living Area
When we talk about living space, we discuss the floor area. The law obliges landlords to carry out a Diagnostic of habitable surface to certify that the property to be rented really corresponds to the standards. Indeed, some dwellings are too small to be habitable. If you refer to the Boutin law, this surface corresponds to the total surface of the floor. The surface occupied by walls, stairs, ducts, partitions, etc., is not considered. Nor are external elements such as the garage, the balcony, or the space under the attic.
Renting Furnished or Empty?
If you want to rent out your property, this question should also be asked. In fact, furnished accommodations are the most popular in areas close to universities. Therefore, you should consider this parameter. However, to be regarded as a furnished rental, the accommodation must have the necessary equipment. You should refer to the list of these facilities and allocate a separate budget for their purchase.