Every prospective renter has done the search - the search for a point-by-point "What to look for in a rental property”. Personally, every time I look for a new place to call home, I do the same search just to refresh my memory about all the important items that separate the great rental places from the not-so-great ones.
It’s comforting to have a guide to help us focus on what we need to look for when trying to find that perfect place. But in today's demand-heavy rental markets, many renters are rushed into flats only to find a few, let's say, unsavory characteristics they hadn’t noticed the first time they toured the place.
The problem - especially with older flats - is that paint, plaster, arrangement, viewing time, and many other tricks can be used to cover up certain issues in a prospective new living space.
This can seriously throw off your intuitional valuation - the value you put on attributes a property may have. But I’m here to remind you that, like most decisions, there are two fundamental factors you're negotiating between when looking for a place to call home: Subjective & Objective factors.
In a property search, Subjective factors include the condition of the flat, the local area, the commute, and all the little things that each individual grade on their own, personal scale.
Objective factors cannot be argued, they are the square meters, number of bedrooms, number of bathrooms, rental price, and other factual data that a listing discloses, or can be gained from the listing agent.
We often search for properties using subjective factors, which is fine if your budget and market conditions allow for it. But for many, that’s not a reality.
The reason for preferring subjective factors is simple - it principally takes our personal preferences into consideration… and who doesn’t want their preferences to be considered? I get it, but let's be honest with ourselves, the reason objective factors are overlooked is often we have 20 other things on our to-do list we’d rather do than gather seemingly dry rental data. But I promise you, paying close attention to these will save you a lot of money and also allow you to hone in on the subjective factors that matter to you most.
Let me illustrate a personal experience to show you what I mean: When I first moved to the UK, I entered a very hot market in which everyone told me, “If you like the flat, don't leave without signing the contract.” I thought this was just crazy talk from some risk-averse friends. Well, after a few flats that I liked popped off the market the day I viewed them, it was clear I was in a hot market or, at least, looking in hot areas.
Over the next few weeks, I continued to have problems finding a place that I didn't have to rush into. During this time I noticed that my personal preferences were mattering less and less. It became clear - demand was so high, my preferences no longer mattered. I went from having my list of "needs" and "nice to have's" to quickly adjusting to a new way of thinking: The “I just want a home” way. But, there was an internal dialog negotiating my preferences versus the market pricing. I knew my budget (~£1,000) should be able to secure a decent property in the general area I was searching, but I would have to pick and choose what was really important. This mindset forced me to value everything from an objective standpoint - how much is a terrace, garden, extra bedroom, etc. worth to the market, and ultimately me?
I started to look at the market more objectively - studios and one-bedroom flats are usually closer in price than the jump in price from one to two bedrooms… but I noticed the price per bedrooms between 1 and 2 in certain areas didn’t differ as much. In this particular city at the time, the price for proximity to the city center mattered more north to south than east to west. And one of the biggest factors I used, was how long a property had been on the market versus the area average. With this data, I could find potential rentals (even above my budget) and have a good shot at not only securing one but having a chance to negotiate the price!
Armed with this information, not only did I find a flat in the next few days, but it was a two-bedroom place just east of the city center. Even better, I was able to negotiate the rental price from £1200 to £1000 due to the property being on the market for 41 days when the average in the area was 9 days. Yes, it had a narrow stairway into the entry, but I could see the sea from this top-floor flat, walk to work, and live within minutes of the city center without paying the premium. The unusual stairway (something that likely held this property back for 41 days) didn’t even register on my subjective radar when I saw the potential value.
In this example, knowing the number of days on the market was the biggest factor. Knowing that piece of objective information, allowed me to spot properties that would be easier to secure, and also discount the flat’s true value. And for something as minor (subjectively to me) as a narrow staircase, I ended up with a perfect flat while saving £2,400 a year!
You may be thinking, “OK Patrick, respectable job on the flat, but I still don’t want to put in the time for data gathering.” I get it. Even for data junkies, gathering this kind of information can sound like a real chore. And for a normal person just looking for a new place to live, it likely sounds as fun as the flu. Well, you’re in luck and it looks like you've already found the site that can help you - Looped!
Just remember when looking for your next home don’t forget to look into the objective factors around pricing! And since you probably want a few bullet points to add to your list:
Price distribution - Where is this property priced compared to other properties with similar factors in the area, neighborhood, or street
On the market timing - How long has it been on the market versus the average time, others have been on the market. The longer the better for the renter to negotiate, as a property owner is losing money every day it's on the market
Effects of attributes - Consider the basics of what you need or want, but remember there is always a trade-off. It’s wise to know what an extra bedroom in an area is worth, or specifically if that terrace worth an extra £300 per month!? Attributes to start with are the size (beds/bath), but quickly get to accessory attributes like terraces, top vs bottom floor, proximity to needs, etc.
Thanks for reading and if you have any questions or comments please feel free to reach out to us at patrick@Loopedhousing.co.uk