The rental rate is the market settlement rate for the use of specialized properties for which those properties would be rented out. When determining the value of the market rate and calculating the rent, take into account the main features that are associated with the specifics of a particular object.
Instructions
Step 1
Establish the quantitative and qualitative characteristics of the property for which you are assessing the rent. Collect detailed information about the property being appraised by visual inspection of the premises. Also, analyze the information that the customer has provided you. To analyze the object, evaluate the following parameters:
- location of the object of assessment;
- information relating to the current use of the object;
- various encumbrances and property rights that are associated with the object;
- the physical characteristics of the property.
Step 2
Next, analyze the current state of the market and other factors that externally affect the amount of rent. In this step, collect all the information about the pricing factors that affect the level of the market value of the property. Collect data in the following areas:
- socio-economic situation in the area where the object is located;
- macroeconomic factors;
- the situation in the relevant market sector and the patterns of its development.
Step 3
Analyze how the most effective use of the appraised property can be organized. Draw a conclusion about the most effective use case for the subject of assessment, based on the information you have collected and taking into account all existing limitations and the specifics of the subject of assessment itself. Also consider the typical use of such properties.
Step 4
Take different approaches to assessing the level of rent. At this stage, consider using three standard approaches to valuation: profitable, cost, and comparative. Choose the most appropriate approach (or several of them) and calculate the rent according to the chosen method.
Step 5
Agree on the results of the calculations and draw a conclusion about the final amount of rent for the appraisal object. After that, determine what the direct rent for this property will be, provide information about its size to the person concerned.
