Not long after starting out in the Edinburgh property industry, I asked the advice of a more experienced colleague about how he went about valuing a property. After a long and wistful look he answered with “I just walk into a place and think to myself, what would I pay for this?” This was a daunting answer as it implied to me that valuing a property was a dark art that would take years of experience to master. However, I’m pleased to say that what I have learned since then is that valuing property for rent is a more a balance of research, preparation and judgement and this is how an agent does it:
- Prior to visiting a prospective rental property, find out if it is a flat or house and how many bedrooms it is comprised of. Then use the street name that the property is on to run a search for comparable properties that have rented on that street in the last three years on one of the broader marketing portals out there like Citylets or Lettingweb. For streets like Dalry Road where there will be a large number of results I would advise narrowing the search window to 12 months or 6 months. If the data covers more than 12 months then it is a good idea to group results in to averages for each year to see how the street has been affected by trends. I would advise using at least 15 results to obtain the average rent for that street. If not enough data is available then broaden the search to be for the whole area and not just the street. This will provide enough data to obtain the average monthly rental for the number of bedrooms on that street or in that area. That should be the starting point for visiting the property to nail down an accurate valuation.
- En route to the property, have a good look at the other properties on the street to get an idea of how much the specification of the properties will vary on the street. This gives an idea of how much variance to allow for in the average rental figure that has been reached in 1.
- Upon meeting the client in the property, ask them for a tour of the property and ask questions during the tour to find out what makes this property different from others in the street. For example, does this property have off-street parking or a private garden where the others do not, or vice-versa. Look at how well the property is decorated and furnished. Does it have double glazing and central heating? Once the tour has been completed, this is where experience is required to make a call on whether the property is above or below the average figure that was calculated beforehand and if so, by how much.
So this will provide an accurate figure for the expected rent that can be achieved. I would always recommend starting the asking rent slightly higher if the client has some time before the flat becomes vacant to gauge the levels of interest. After all, the rent level that a specific property will rent for depends on the one tenant that ends up taking it. I hope this helps.