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Make
Sure the Price is Right on Your Residential Letting
by
Philip Suter of jml Insurance - EzineArticles.com Article
February 2006
With
so many people entering the Buy to let market in the
UK, Ireland, France, Spain and other countries it is very
important get the rental price competitive. This applies just
as much if it is a long-term letting or a self-catering holiday
rental.
If
you have just purchased a residential letting property and
have a mortgage you naturally have to cover the payments,
but regardless of a mortgage to service, if your property
is over priced renters will not pay a higher price. The only
time when this can happen is when there is a small supply
of property and big demand for that that type of letting.
In the UK a tenant will still have to pay gas, electricity,
water, Council tax, telephone and insurance on top of the
monthly rent. In other words a rental of £650 per month means
£900 per month of total outgoings. Many Landlords do not realise
this and think that all the renters have to pay is the rent
to them.
A
landlord who insists that their property is “worth” £X
per month and in reality they have been advised by the
professional agent it is only worth £-X can have problems.
If it stays on the rental market for a while at a price that
is too high they will never make up the lost rental (unless
there is galloping inflation). It can of course be a totally
different scenario with a property that is being sold; particularly
if property prices are rising in the area or country.
With
a self-catering holiday rental you have to offer the property
on what the ”market will pay”. Your property just might be
located in area whereby there are seasonal or (one time) events
when beds are at a premium and to be able achieve a much higher
price. (Wimbledon- England for the tennis, Monaco for the
Formula one Grand Prix, Cannes, France for the film festival,
Cheltenham-England for the horse racing in March etc.) At
other times unless your property’s price is competitive it
will remain empty more often than full.
If
you are using an agent, take advice from the agent. They are
normally local to market conditions for long-term rentals
and for holiday rentals a specialist agent will have studied
your area and keep rental values up to date. If you are using
the Internet as a guide spend some time researching. Use a
search engine to find a rental agent in the area your property
is located in or for a self-catering holiday rental get comparables
from a site like jmlvillas.com.
Finally
remember with the long term rentals market that although some
people are prepared to make an offer, don’t pitch the price
high so that you think you will get a Tenant wanting to make
an offer. They don’t necessarily do that. Many people wanting
to rent think that prices advertised are fixed and the owner
won’t negotiate or they don’t even think to go down that route.
They will look at the next available property in “their
price bracket”. This is rather like shopping in the High
Street. They will only pay the price the “goods” are being
offered at in the window.
With
a holiday rental,it is very rare for a holidaymaker to make
an offer; they just purely search in their price bracket.
Philip
Suter is a Director of JML Property Services http://www.jmlproperty.co.uk
a UK based company offering Insurance products on line at
http://www.jml-property-insurance.co.uk and a holiday
home advertising service http://www.jmlvillas.com
and management training within the uk. He is a very experienced
property consultant with over 30 years work in the Residential
letting business in the UK and served on the National Council
of ARLA. He is a Fellow of the National Association of Estate
Agents (NAEA) and a Member of The association of Residential
Letting Agents (ARLA) Article Source: http://EzineArticles.com/?expert=Philip_Suter
©Philip
Suter jml Property Services February 2006
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