How we decide the monthly rental rates for residential letting properties – and why the end of long-term tenancies is a time for review
By Helen Quickfall, Gro Residential Management Manager
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 properties in a similar area go for similar prices.
We research, guide and advise, and will always suggest if we feel the rents are too high, too low, or just right.
Ultimately, it is a property owners’ choice if they want to market the property at the value they decide, based on their own research.
However, if your rental price is not quite correct, it can affect how long a residential lettings property can sit 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 agreeing a tenancy which brings in hundreds, or even thousands, less a year than it is capable of.
At Gro Residential Management, our role is to advise landlords on how to maximise the value of their properties, but crucially also get the rental pricing right to ensure they spend as little time as possible sat empty and on the market, and as much time as possible generating income.
Valuations based on extensive research and data
At Gro Residential Management we have decades of combined experience across our team in valuing the rental value of residential letting properties in Yorkshire, with particular expertise in popular locations including Hull, Beverley, and York.
However, we go much further than trusting our own experience and instinct, and use up-to-date data from Rightmove Plus, an online portal which is only accessible to paid members of the UK’s largest property portal.
It provides us with a series of data-driven tools and reports, giving us valuable insight into the market to help us set, benchmark, and justify rental rates.
We can research rental listings - over any set period of time - in specific areas, and for all kinds of property types and sizes.
We are also able to research how quickly properties in areas have let, at what price, which properties remained unlet for extended periods, and the price at which they were marketed.
Essentially, we have all the information at hand to be able to research the market conditions of every type of property, in every location, and suggest a rental price per calendar month which we are confident reflects both market and maximum value for the landlord.
Same location, same style property, different price?
Of course, the location, size and style of a property are not the only factors influencing price.
The condition of the property inside, standard of décor, and facilities such as kitchens and carpets, have a significant impact.
Two similar properties, pretty much side by side in the same location, can still differ in price per month in rental value if one has been left untouched and outdated for many years, and the other has been constantly well maintained and modified with good quality, modern facilities.
Crucial to review rental rates at end of long-term tenancies
Landlords love to have reliable, long-term tenants who look after their properties and guarantee monthly income.
However, in many cases, these properties are the ones which can fall some way behind the current market rental value.
At Gro Residential Management, we’ve advised landlords who have asked for our input when a long-term tenancy has ended, and they have been surprised when we have advised them on the property’s current rental value, which has been much significantly higher than they had been charging.
This is because it is standard practice only to increase rental rates to current tenants incrementally each year, meaning the rental rate in these circumstances often doesn’t follow and keep up with market changes.
So, if you are a landlord with a long-term tenancy ending, we’d advise having the rental rate professionally assessed before placing it back on the market, as you may well be pleasantly surprised at its actual rental value.
If you need advice on what rental rates you should be charging for your residential lettings properties, or want your property portfolio reviewing, contact our team today on 01482 566057 or email hello@gro-residential.co.uk
