For how much is it worth to rent out your luxury property? - Image 1

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For how much is it worth to rent out your luxury property?

08/03/2022

For sellers and landlords

Unique Estates

If you are planning on renting out your luxury property, it is crucial to select the most convenient market price. Discover some of the factors to consider when determining the price of your property. Look into them here!

The process of choosing the right price step by step

High end and luxury homes have some specific characteristics that distinguish them from the other estates. Primely is the property location, followed by its amenities, number of rooms, and views. It is these elements that are determing the value of the property and, accordingly, the monthly rent that you can demand from the future tenants. Consider that luxury furniture and interior significantly increase the value of the monthly rent. Same would apply for the proximity of the estate to key sites, as well as if the apartment is located in an affluent neighborhood.

You can always contact an agency for a consultation

Finding great tenants can be challenging, especially in the luxury segment. Consequently, it is best to trust the specialists in the field – the real estate consultants. In addition to saving you a lot of time and effort, the agency will take care of everything, related to the search and selection of prospective tenants, as well as the entire administrative and legal part of the deal.

Among the other significant advantages of the consulting agencies is their great client’s database which will grant you access to a larger list of potential tenants. As real estate consultants specialize in communication and negotiation with clients, they will prepare all the documentation and will assist in case any problems occur with the tenants during the rental period. Using the services of a broker would reduce the risk of concluding an unprofitable deal, as he is quite familiar with the regulations and processes in depth and is aware of the rights and obligations of both parties. In the event of a legal case, the experts from the legal department of the agency can assist, which should not be underestimated.

When it comes to high-end residential properties, the significant part is how they are being advertised. Agencies that specialize in selling and renting luxury properties can prepare a complete advertising plan, including both the messages and the communication channels for reaching potential customers.

The contract is the essential part of closing the deal with your future tenant. The consulting company will provide you with full assistance in conducting negotiations and preparing the rental agreement, which usually includes clauses, specifying the period of validity of the contract, rental price, deposit, terms of payment, rights and obligations of both the tenant and the landlord, the termination clause, etc. It is recommended that the handover protocol be included in the agreement, especially when it comes to a luxury estate with modern furniture.

Estimate your property costs up to the time of rental

Once you have decided to rent your luxury property, you must consider what expenses you have had for it in the past – for instance, home renovation or furniture upgrade. The appearance of the estate is directly related to the determination of the monthly rent. The consultant can also be useful with counselling how to make your property more attractive to the tenants. Accordingly, it is possible to invest additional funds in refreshment and furniture, which you might take into account.

It is crucial to note that after renting the apartment, you will also have some maintenance costs. This may include various elements, depending on the agreement with the tenant, and it may even be necessary to replace depreciated furniture or electrical appliances. Luxury property tenants have specific requirements and expect the finest. In this regard, you won’t meet their needs if you replace the broken, but high quality appliance with one of a lower class. Therefore, calculate approximately what you have invested in the home so far, so that you can adequately determine the monthly rent you will require from the tenants.

Consider the amenities of the property

The amenities and the overall interior are also advisable to be taken into account when determining the monthly rent price. Natural and expensive materials used for furniture, as well as quality appliances have a direct bearing on the final decision on the rental price.

Active drivers in the capital city inevitably find themselves in a situation where they do not have access to a free parking space in front of their building. Therefore, the presence of a parking space or a garage in addition to the apartment is considered an extra, which greatly facilitates the daily life of the tenants. The presence of more and more neighborhoods in Sofia with paid parking zones and greater construction, respectively, and a growing residents number, makes tenants look for the option of included parking spaces for their car. Consider that renting a parking space or garage in a residential building further increases the rent. Garage prices vary, depending on their size, condition and location. It is a matter of personal choice whether you decide to rent out the parking space separately, or in a package with your property.

Be sure to consider the location

The estate location is among the most essential factors that affect the price of the property. It is no coincidence that the prices of rental apartments in Sofia are directly related to the neighborhood in which they are located. Apart from the area, it is also crucial how communicative the place is, ie. are there convenient public transport stops nearby, is the infrastructure well arranged, what is the proximity to key sites, etc. Certainly, the personal preferences of each tenant depend on his lifestyle and are strictly individual for everyone, but the price range in different neighborhoods and areas vary and it is advisable to be considered. The development of subway lines also affects the rents in the area. There is a tendency for the prices of rental apartments in Sofia, located near the metro line, to be given at a higher price compared to those in other areas.

Determine the price, taking into account the size of the property and the construction type

The apartment space is no less important factor that affects the rental price. The larger the area of your luxury home, the more spacious the individual rooms, and consequently the higher the price you can offer. Advantages are the presence of a work space, relaxation room, or a sports one, a library, extra bathrooms, a terrace with a breathtaking view, a jacuzzi or other luxury additions.

The construction type is another indicator that also matters for the final rent value. Quality construction can be a significant factor in higher rental prices. In your pricing you can take into account factors such as well-maintained common areas, concierge and video surveillance, additional services in the building.

Find out at what price you would rent the property

Establishing a market price is a complex process that requires extensive market knowledge and experience. It is important to consider that setting a price that is much higher than the market will push back potential tenants. To afford such a step, the home must have exclusive extras. Otherwise, you risk keeping the home on the market for a long time. This is a time when the cost of maintaining your prestigious property will continue to flow. On the other hand, announcing too low of a price will also bring you losses, as you will not have the right to change the price until the contract expires.

Thus, it is best to consult with a highly qualified real estate agent to get an objective assessment of the opportunities that your property has. Unique Estates consultants will assist you in the most effective way, by determining the exact rental price of your property, entirely in your favor. The company has a rich portfolio of properties and has built a long-standing client’s database with a higher living standard. From Unique Estates experts you will receive a real assessment of your desired investment or return on a property, based on facts, verified opinions and applicable standards.

Read more from category For sellers and landlords

Брокер представя условията на предварителен договор за покупка на имот

Do we need a broker when buying and selling a property?

Many of you probably ask this question when it comes time to change homes or purchase a new property. Why do I need an agency when there are websites show direct information from an owner?

Generally speaking, a real estate agent will save you time and effort, protect you from incorrect owners, and guide you seamlessly through the process.

How is a property sold?

When selling a property, it is important to consult a professional who can provide you with a housing market research and help you determine the market price of the property. It is also recommended to have a realistic description of the property to attract the attention of buyers, helping them to get oriented in its advantages.

How is a property tax assessment made?

The issuance of a tax assessment requires the submission of several types of documents, which you can request through a specialized portal for the provision of electronic services, with an application at the counter in an administrative service center, by e-mail or by post, electronically through the secure electronic delivery system.

How is the market price of a property determined?

The market price is determined by real estate professionals using the comparative market analysis method. The purpose of the analysis is to determine the correct price range in which to position a property when it is advertised for sale.

How is profit tax calculated when selling a property?

The profit from the sale of a property is not taxed when the home has been your property for 3 years. In all other cases, the difference between the sale price and the purchase price is taken into account when calculating taxes on the sale of a property. The income is formed on a tax base and this tax base is reduced by 10% of the legally determined costs.

How much is my property worth?

The surest way to find out how much your property is worth is to consult with a professional in this field. We at Unique Estates can help you by providing you with a reliable valuation that is based on in-depth market research by professionals as well as our own data acquired over the years.

How are the undivided shares of a property calculated?

For each independent property, the undivided shares are calculated using the following formula:

Undivided Shares (%) = (Built-Up Area/Gross Floor Area) *100

Where:

Undivided Shares (%) is the size of the common areas adjacent to the property.

Built-Up Area (BA) is the built-up area of a property.

Gross Floor Area (GFA) is the total floor area contained within the entire building.

How is a property boundary determined?

A property boundary is determined by filing a petition to fix the boundary between properties. In order to determine the exact boundaries of a landed property, it is necessary to carry out the so-called tracing. This means to mark various points, lines, planes or surfaces on the terrain.

How is rental income declared?

There are two options for declaring rental income. In the first case, if the tenant is an uninsured natural person, it is the responsibility of the landlord to declare and pay the applicable rental income taxes. In the second case, if the tenant is a self-insured person (or enterprise), the tax amount is determined and the tax is withheld from him/ her at the time of its payment.

How is a rental agreement prepared?

If you are considering renting out a property, your cooperation with a professional lawyer is very important. He will help you to draft all mandatory clauses of the agreement in accordance with the Obligations and Contracts Act (OCA, Articles 228-239) and the Landlord and Tenant Relationship Act.

How is a rental agreement concluded?

According to the Bulgarian legislation, a rental agreement can be concluded both in written and oral form. In both cases, the agreement is considered valid and has legal force. However, the choice of an oral agreement hides significant risks, mainly due to the difficulties in proving the agreed terms and conditions.

How to terminate a tenancy agreement?

When you wish to terminate your tenancy agreement, you must comply with the period specified in the agreement and give prior written notice. If you wish to leave earlier than this period, you must pay a penalty to the landlord.

What is a property management service?

The property management service releases the landlords from their responsibilities throughout the rental process and from the subsequent tasks of collecting the rent and monitoring the property.

How to sell a luxury property with Unique Estates?

Contact us and our team of experts will prepare a special Comparative Market Analysis to determine the correct market price and potential customers for your property. Trust our professional real estate consultants who will give you the right guidance on how to successfully sell your property.

How to make an expert appraisal of a property?

The first step in making an expert appraisal of a property is to contact a certified appraiser registered in the Chamber of Independent Appraisers in Bulgaria. For the process, you will need an ownership document, an up-to-date sketch or cadastral map of the property and other documents depending on the type of the property.

When market analyses and research are conducted?

Market analyses and research are conducted before making important business decisions, launching new products on the market, making investments, or expanding the business into new markets.

What does a market analysis involve?

The market analysis includes a complex analysis at several levels: general market analysis, industry market analysis, market analysis of an individual product. These assessments provide valuable data for informed decision making and strategic planning.

For whom can the real estate market analysis be useful?

The real estate market analysis can be useful for investors, home buyers, agents, financial institutions, property managers, end users, etc. It helps in making informed decisions and understanding market trends and property prices.

Where to post an ad for the sale of a luxury property?

Before selling your property, it is important to choose a consultant who will give you the right guidance on how to most successfully and smoothly carry out the transaction. Trust our professionals at Unique Estates, who offer complex services in the field of real estate in two directions - Premium and Standard.

Where to obtain a property sketch?

The first step in obtaining a property sketch is to check with the Geodesy, Cartography and Cadastre Agency (GCCA) whether the property falls within the territory with an active cadastral map. A check of the sketch can be carried out in any regional city in Bulgaria at the Geodesy, Cartography and Cadastre Office (GCCO).

How to rent out an apartment?

Renting out an apartment can be made both with the help of a real estate agency and independently. Choosing to work with an agency provides a number of advantages that can significantly accelerate the conclusion of a rental agreement.