Real Estate

Thinking about renting a property? Ask your main questions

The process of renting a place to live involves many details that require the attention of both the landlord and the tenant. In this article by capital smart city , you met all the rules contained in the Tenancy Law.

In addition to understanding their rights and duties, the two parties involved need to understand how lease amounts, adjustments and what to do when rent is not paid are defined.

With this in mind, we separated the main financial doubts of those who will rent a property.

1. How is the price for renting the property calculated?

A very relevant issue for those who are going to rent a property is the amount that will be charged. And it can be interesting to know which aspects influence a lower or higher price.

Basic Unit Cost

The rental price of a property is influenced by its dimensions, construction pattern and time of use. Some of these issues can be referenced by the Basic Unit Cost (CUB), which is calculated by the Civil Construction Union of the state where the property is located.

Sale value

A market convention for setting a rental value is to consider 0.5% to 0.6% of the property’s sale value. Remembering that this cost is net and does not include property tax and condominium.

Market value in the region

The values ​​already practiced in the neighborhood of the property can also be an indicator for pricing. In this case, properties in similar conditions and characteristics or even in the same building can serve as a parameter.

Location

Another important aspect for setting the price is the ease of access to commerce, services, leisure options and transportation. The more complete the region close to your property, the higher the amount to be paid can be.

Property age and maintenance needs

A property with an older structure certainly includes a higher maintenance cost than a newer one, and the price is influenced by this issue. On the other hand, if the property is new or semi-new, it offers more comfort to receive the tenant and can cost more.

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2. How is the rent adjustment calculated?

The rent adjustment takes place once a year, as specified in the lease. This readjustment is responsible for correcting the price according to the period’s inflation, adjusting it to what is practiced in the market.

In the Brazilian market there are three main indexes to perform this calculation:

IGP-M

The General Market Price Index is calculated monthly by the FGV (Fundação Getúlio Vargas) and is released at the end of each reference month. It is widely used as a reference for contract correction, including property leasing.

IPCA

The Extended National Consumer Price Index (IPCA) measures the variation in costs and expenses of various items consumed by families in urban areas with income between 1 and 40 minimum wages – approximately 90% of the Brazilian population. Due to its wide scope, it is able to show how price fluctuations affect the population.

INPC

The National Consumer Price Index works similarly to the IPCA, but considering only low-income families, who earn between 1 and 5 minimum wages. It is a little-used indicator, but it can work for renting properties to lower-income clients.

The calculation of the adjustment

Regardless of the index used, the readjustment is calculated in the same way, at the time of the contract anniversary. To do this, look for the value accumulated by the index in the last 12 months and make this calculation:

Example: Property with current rent of R$2,000 and accumulated IGP-M of 5%

Readjusted value = BRL 2,000 + (BRL 2,000 X 5%)

Readjusted value = R$2,000 + (R$100)

Adjusted value = BRL 2,100

3. Who pays for renovations and repairs to the property?

The Tenancy Law establishes a series of obligations of the lessor and lessee during the term of the contract:

  • The lessor must deliver the property to the lessee in a good state of habitability. Any problem that prevents or disrupts the tenant’s life must be repaired before the tenant moves. Any renovation at this time must be paid for by the landlord.
  • If during the lease the need for structural repairs arises, such as on the walls, walls or roof, everything will be the responsibility of the lessor.
  • The lessee only bears the expenses in case of damage or misuse caused by him or third parties during the term of the contract. The tenant’s responsibility is to ensure the conservation of the property and deliver it, at the end of the contract, as received.

4. What types of lease guarantees are there?

In the lease agreement, the lessee must present a form of lease guarantee, which works as a protection for the property owner in case of non-payment by the lessee.

The main types of guarantees are:

Guarantor

With the guarantor, the lessee must present a person who will be responsible for the expenses if he fails to comply with his obligations.

To be approved, the guarantor must prove income of at least three times more to be able to pay a possible debt. You must also have no restrictions on your name and own a property in the same city as the property to be rented.

surety bond

With surety bond insurance, the renter takes out an insurance policy to ensure that the rent will be paid. The policy is valid for one year and needs to be renewed after this period, otherwise the lease is without rental guarantee.

3-month security deposit or deposit

By opting for this modality, the lessee agrees to deposit up to three months of rent at the beginning of the contract. At the end of the contract, the value is fully returned to the lessee if the property is delivered without damage and financial pending.

capitalization title

Capitalization bonds are purchased from banks, which guarantee the rent. The lessee then pays a fee, lending the money to the bank without being able to move during the period of the lease.

At the end of the contract, the lessee can recover the capitalization reserve with the updated values.