Rent Surveys are a mechanism used to determine what level of rent is appropriate to levy for a particular property. These are typically used by landlords who want to ensure that they are getting the maximum amount of profit out of a particular property.
Rent Surveys are an integral aspect involved in the process of renting a property, whether you are a landlord or a tenant and this is more significantly seen in regards to commercial real estate.
Whenever conducting Rent Surveys, an appraisal company is typically involved. This is because rent surveys involve assessment of the inherent worth of the subject property and subsequent comparison of that cost with other properties of a similar stature.
In order to achieve results, it is necessary for an appraisal company to rely upon different variables. Some of these are:
- Condition of the property: If the property is badly damaged, in need of structural repair or otherwise significantly unfit to dwell in, then this will have a detrimental impact on the amount of rent that can be charged.
- Assumptions and disregards: These are conditions which relate to the fictional character, the hypothetical tenant who is entering into a hypothetical tenancy. Would they be willing to accept certain conditions? Also, a landlord will not be entitled to charge a higher level of rent if the value of the leased property increases due to the improvements made by the tenant.
- Duration of the tenancy: The duration of lease or the time period for which the property will be rented, also plays a major role in determining the value of chargeable rent.
- Nature of which the tenancy is used for: Is the property being used for personal or commercial use? The rent will vary depending upon the purpose for which the property will be used.
- Anchor Tenant: If the property is a commercial one, it is important to know whether or not the tenant will be acting as an "anchor tenant". An anchor tenant is a commercial unit which will be liable to attract a large volume of customers and foot traffic, who would then be enticed to make purchases at other stores due to the presence of the anchor tenant.
- Current market conditions and the average value of rent being charged.
Rent Surveys are a very complex and tedious aspect of appraisal, it is little wonder then that courts have been swamped with cases concerning this legal quagmire.
However it is crucial that whenever you apply for such a rent survey, all the aspects are carefully drafted and ratified by the parties. Doing so will significantly reduce the chances of future problems which can prove to be very time consuming not to mention expensive for both parties.
At "Appraisal California", we ensure that all rent surveys that we carry out on behalf of our clients are done to the highest standard possible. Our customers do not need to worry about the risk of future litigation further down the line as we guarantee the highest quality of service in all cases. We have worked with real estate attorneys in the past, and could offer a referral to legal services should they be required.