Very often it seems that the owners of property set the price randomly without thinking it over properly. At the same time determination of the right amount for rent is very crucial and can be done by simple calculations.


Correct price is crucial

Determination of the rent price is a very important step. When set too low, you will fail to profit and pay the rest of rent yourself. When the rent is too high it can also cause that the flat will be empty and you will be losing money as well. How to set the correct price? There are 3 methods that can be used or combined together.



Comparative method is the most usual

Method by comparison is a basic method of determining rent price. It is important that rent respects local customs and should not differ much from what is usual in the area. Also an excess of demand over supply and desirability of the location play important role in the process.


Another important fact are services included in the rent or requirement to pay most of the rent ahead – which, of course, means the price of rent should be lower. How to find usual rent price range for the location? There are various possibilities. Usually data can be requested from Czech Statistical Office or similar data can be obtained from Ministry for Regional Development.


Also it is possible to search information on-line where data regarding rent prices are collected by real estate agencies.



Cost method hints the bottom limit of rent

Another method to determine rent price is a cost method. It considers age of the building, its purchase cost and costs necessary for potential reconstruction. As a time period without any greater reconstruction needed, a limit of 30 years stands for the reason. Therefore it is necessary to divide all costs into this period to come up with bottom limit of rent.


Revenue method

This method can be also used as a supportive method. Given property is considered as source of revenue. This revenue should not be lower in comparison to other possibilities of saving money originally spent on property.