The purpose of any rental investment is to collect rent. But above all, you have to set the amount. At the beginning of a lease, this amount can be set freely but there are however several constraints that limit this freedom, including the concept of a tense area. Let’s take stock of the methods of estimating rent.
Good practices for estimating a first rental price
In addition to the possible management of rents, there are other criteria to be taken into account when estimating a first rent. Indeed, it is customary to consult the market prices charged for a good similar to yours. You can get information from the neighborhood or consult the rent observatories on clameur.fr and anil.org. You will find market trends and many tools to help you estimate.
Rent estimation: mistakes to avoid
When you rent your property for the first time, you must be careful to estimate the amount of rent. Your goal in realizing this rental investment is to make it profitable and the rent is largely, if not exclusively, guarantor of this outcome. Be careful not to set the amount too high: indeed, asking for a price above the amount of the market may scare potential tenants of your property. In addition, rent that is too high increases your risk of experiencing a period of rental holidays that will reduce your rental income. On the contrary, you should not set a rent too low. Indeed, this can be detrimental: certainly you will have more prospective tenants but you must always think of your rental profitability. On the other hand, once you have set the amount of rent, if it is too low, you will have great difficulty to adjust it up because of the IRL (Rent Reference Index) which intervenes in the annual revaluation of the rent.
Estimated rent in case of re-lease
When relocation in a tight zone, the rent is capped: a rent was already fixed with the former occupant of the premises and the new amount of the rent that you will fix cannot exceed that applied to the previous tenant. When a new lease is signed, the rent charged can only be revalued upwards within the limits of the annual variation of the IRL. In addition, this increase is only possible if you have not already increased the rent in the year preceding the new lease. Be careful, even if you have not revised the rent of the house for several years, it is not possible for you to cumulate the indices of IRL applied since the past years.