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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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