Ascertaining Rental Value

Now that you have purchased a property and ready to rent it out, you have to derive the right price range for renting it out. It is mandatory to know the optimum rental value because a lower rent will result in loss to the Property Owner and higher rental value will result in putting off the prospective tenant – discover rental value.

To make sure that you derive at a right price, explore the following factors:

Market Value

The Rental value of the property is in direct proportion to the Market Value of the Property.

Market value of a property is the current value of the property in respect to the infrastructural developments. For example a new fly over or a metro rail link increases the value of the property and will increase the rent of the property.

For properties in demand and developments of infrastructural facilities like drainage and metro water by the Municipality also increase the value of the property along with decreases the recurring expenses eventually you can command a higher rent.

Stalled infrastructure projects, congestion in traffic, depletion of natural resources & availability of essential commodities, increased pollution levels etc decreases the market value and also affects the rental value.

ascertaining rental value

Property’s Desirability

Apart from the location, infrastructure developments, type of property, Sq. Ft. of the property are some of the general factors.

The other specific factors with respect to the unit like parking facility, amenities in the house, design of your unit, size of the bedrooms, storage, location of your unit (in the same street), balconies, view of your property, facing, age of the building – can have different desirability levels compared to the other properties.

Prevailing Rental Rate

It is important to do a research into the market of your area. Look around the neighbourhood for similar properties and enquire about their pricing. You can also contact a local Property Consultant of Property Management Company who can advice on the Rental Value as per the market.

Vacant Properties

It is also important to make a list of vacant properties in your neighbourhood. Vacant Properties for a long time indicate that the demand for the property is less or the pricing of the property is not viable in the market.

In a saturated market, a reasonably priced property will not be rented out quickly. In such a market, the House Owner has to consider offering incentives or additional amenities if required.

Also make sure to evaluate the reasons for a property being vacant for a long time. The reasons could be insufficient parking, storage, location of the unit, physical home size – bedroom sizes, bathroom, furnishing in the unit, etc.

Properties that are rented out quickly have a possibility of fetching a higher rent.

Other Factors

The other factors which determine a slightly rental value are type of fittings and fixtures, clubhouse & facilities (like swimming pool, club house, jogging track, supermarket, visitor parking, etc), schools close by, connectivity, additional balcony as compared to the similar properties in the locality.


Evaluating the above factors will assist you to
1. Respond to the prospective tenants appropriately
2. Minimise the Vacancies
3. Assess the increase or decrease of rent in future.