The 2 rents in property...

Brett Alegre-Wood
Chairman, YPC Group

Hey guys,

I have been putting the finish touches on my book and have realised that some of the main principles we speak about have passed through the cracks in my blogs. As in we've never chatted about them. So he's one of my favourite and probably the most critical when dealing with a Property Investment company because it is most often the one that they leave out.

The â??two rents of propertyâ??

â?? Valuers Rent
â?? Realistic Market Rent

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The Valuers Rent
The first rent is what is called the Valuers Rent. It is the rental figure that shows on the RICS valuation and it is figure that will be used to calculate the buy to let mortgage you will receive. This may come as a surprise but it will rarely be the amount you will actually receive. Let me say that again!

In my experience you will rarely receive this amount of rent.

The Realistic Market Rent
The second rent is much more important to the ongoing viability of your property. This is called â??Realistic Market Rentâ?? and it's the realistic rent you are likely to receive. This can often be quoted as two figures: a high and a low figure or sometimes an unfurnished and a furnished figure. A lot of Estate Agents and Property Investment companies will never explain this rental figure to you because they donâ??t want you to see the real impact on cash flow. In some cases they will just have not done the research right.

In any case, you need to know what both these rents will be so donâ??t just accept what a salesperson says.

We regularly have a Valuers Rent of say Â?750 per month and a Realistic Market Rent of Â?600-Â?650. The problem here is that if you work your figures on the Valuers rent of Â?750 and end up receiving Â?600; you have to fund the Â?150 per month extra or Â?1800 per year. That can have a serious effect of your lifestyle if you are not aware of it. That is why itâ??s so important to uncover the Realistic Market Rent.

Live with passion,

Brett Wood

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