How to correctly determine the amount of rent for an apartment or house?

     If you decide to rent your temporarily vacant apartment or house, you will probably get to the question - what is the ideal amount of rent? And why the price calculated in this way?

     The rental price determines from whom and for how long you will have an almost carefree regular monthly income. None of the landlords wants to pay unnecessarily the regular monthly costs for a vacant apartment and thus get at a loss.

     If in the Czech Republic the rent was not interfered with by the state, then all three significant methods could be used to correctly determine the market (locally usual) rent - cost, revenue or comparative.

    Unfortunately, rental prices are now influenced by the state through the Labor Offices of the Czech Republic in the payment of the social housing allowance. Due to headline inflation and the constant and regular increase in rental and energy prices, this social contribution distorts the normal market mechanism. If this social contribution did not exist, landlords would not be able to increase rental prices so sharply and there would be enough apartments for rent. It is true that then a large part of the population could end up on the streets. But the free hand of the market would not be disrupted and young people would have a place to live. Furthermore, the state began to consider another social contribution to increase energy prices. This will double our rental prices.

     The correct rental price should be the market price, ie the maximum possible rental price for non-residential premises calculated by the comparative method according to the locally usual lease, technical condition of the leased object, location and equipment.

     However, if I use the comparative method to calculate the maximum possible rent, which is higher than people with regular work discipline could afford, then paradoxically, people who do not work regularly, do not have proper work habits and the state contributes additional social benefits to them. housing from taxpayers' pockets. These families have a large number of children or they are mostly single mothers or inadaptable citizens. They don't care what the amount of rent is, because the state will pay for it. For landlords, this means many times greater probability of delayed or unpaid rent and energy prices and a high probability of devastation of living space equipment.

     If the price is again unnecessarily low, the landlord will lose some of the money from a possible lease and a subsequent increase in the rental price shortly after the lease may be illegal, but it certainly looks frivolous and will cause the tenant to distrust the landlord.

     It follows that the correctly determined amount of the rental price is a relatively complicated calculation and it is certainly advisable to consult with our real estate agency. Leave the calculation of the amount of rent and the search for a tenant to specialists in real estate valuation and rental of apartments or houses.


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30. 9. 2021