Certainly, regardless of experience and past results, it is always important to look at what is on the market at the time of review but, there is always the additional unknown/intangible aspect of value.“What would a willing Tenant be prepared to pay?” When going to market, this is always the best time to reasonably test and obtain true Market Value.
There are two reasons why rentals are reviewed. Either there is a long term tenancy in place which is coming up for renewal or, the property is being prepared for re-let again to Market. Each attracts a slightly different approach.
When a continuing tenancy is up for review, the goodwill value and cost of replacing the tenancy become a factor. These questions are raised:
1. “What is the established value versus the cost to replace the tenancy?” and,
2. “Is there an aim to retain the established goodwill as well as the tenancy?”
Nowadays, a Tenant will often query if these considerations have been made upon receiving a proposed rental increase. At Silver Service, we can answer, “Yes.”
When a property is being advertised for relet, this is the time to reimagine possibility. In returning to The Marketplace, you are re-confirming the Market Value and, sometimes, a significant increase is achieved.