How we decide the monthly rental rates for residential letting properties – and why the end of long-term tenancies is a time for review
One of the first questions landlords ask us when looking to rent out their residential properties is, “How much rent can we charge each month?”
Some landlords come to us with suggestions of what they would like their property to achieve in the rental market, as they may have seen similar properties in the area let for comparable prices.
We research, guide and advise, and will always suggest if we feel the proposed rent is too high, too low, or just right.
Ultimately, it is a property owner’s choice if they want to market the property at the value they decide upon, based on their own research.
However, if your rental price is not quite correct, it can affect how long a residential lettings property sits on the market, and no landlord wants that to be for an extended period of time – especially if they have a mortgage on the property to cover.
Equally, you could commit to a tenancy which brings in hundreds, or even thousands, of pounds less per year than the property is capable of achieving.
At Oscars Estate and Lettings Agents, our role is to advise landlords on how to maximise the value of their properties, while also ensuring rental pricing is set correctly so that properties spend as little time as possible standing empty and on the market, and as much time as possible generating income.
Valuations based on extensive research and data
At Oscars Estate and Lettings Agents, we have decades of combined experience across our team in valuing residential letting properties throughout Yorkshire, with particular expertise in popular locations including Hull, Beverley and York.
However, we go much further than trusting our own experience and instinct. We use up-to-date data from Rightmove Plus, an online portal accessible only to paid members of the UK’s largest property portal.
It provides us with a range of data-driven tools and reports, giving valuable insight into the market and helping us set, benchmark and justify rental rates.
We can research rental listings over any set period of time, in specific areas, and across all property types and sizes.
We are also able to analyse how quickly properties have let in different areas, at what price, which properties remained unlet for extended periods, and the prices at which they were marketed.
Essentially, we have all the information at hand to research the market conditions of every type of property, in every location, and recommend a monthly rental price that we are confident reflects both market value and maximum value for the landlord.
Same location, same style of property, different price?
Of course, the location, size and style of a property are not the only factors influencing rental value.
The condition of the property, standard of décor, and quality of facilities such as kitchens, bathrooms and flooring all have a significant impact.
Two similar properties, situated side by side in the same location, can still differ considerably in rental value if one has been left untouched and outdated for many years, while the other has been consistently maintained and upgraded with modern, high-quality fixtures and fittings.
Crucial to review rental rates at the end of long-term tenancies
Landlords value reliable, long-term tenants who look after their properties and provide guaranteed monthly income.
However, in many cases, these are the properties that can fall some way behind the current market rental value.
At Oscars Estate and Lettings Agents, we have advised landlords who sought our input when a long-term tenancy ended, and they were surprised to learn that the property’s current rental value was significantly higher than the rent they had been charging.
This is because it is standard practice to increase rental rates for existing tenants incrementally each year, meaning rents in these circumstances often fail to keep pace with wider market changes.
So, if you are a landlord with a long-term tenancy coming to an end, we would strongly advise having the rental rate professionally assessed before placing the property back on the market. You may well be pleasantly surprised by its true rental value.