How do you know if the rent is right?

Determining the fair value of a lease is more than just putting a figure on a contract; it's about finding the balance between what the property offers and what the market is willing to pay. If you're a tenant, you're looking for a place that fits your budget, and if you're a landlord, you want a price that attracts tenants without sacrificing profitability. The market has its own rules, influenced by factors such as location, socioeconomic status, the condition of the property, management costs, and even whether it has parking. A well-calculated rent avoids arguments, empty months, and unfair charges.

How can you tell if the rent is appropriate?

According to Law 820 of 2003, for urban housing, the rent cannot exceed 1% of the commercial value of the property. This commercial value can be established through a professional appraisal, and although many people use the cadastral appraisal as a reference, the law does not require that it be used exclusively. However, it is common for real estate agencies to request it as a starting point for setting the rent. In these cases, some use as a reference that the value does not exceed 2% per month of the cadastral appraisal, as a market practice to guide the most appropriate price. In addition, the owner can only increase the rent once a year, and this increase must be based on the Consumer Price Index (CPI) certified by DANE for the previous year. This ensures that the rent remains within a fair range and that increases are regulated in line with inflation and not arbitrarily.

For example: If the property has a commercial value of $300,000,000, the apartment for rent in Pereira should not exceed $3,000,000. Formula $300,000,000 x 1% = $3,000,000

Tips for evaluating whether a rent is appropriate

Landlords – Don't set prices based on emotion; use real market data – Consider turnover: A very high rent can cause the property to remain vacant for several months – If the apartment for rent in Medellín is located in a gated community, check whether or not the average rent includes management fees. Tenants – Compare with other similar properties in the same area. – Check the condition of the property (finishes, services, parking). – Ask if the price includes administration.

How does the rent increase work with commercial properties?