As you rent a house in Adelaide, one of the main issues of concern should be the total cost of the rental. With so many rental properties in Adelaide, finding a nice house that’s within your budget can be a challenge because you have to review thousands of properties. If you are looking for an affordable house in Adelaide, you have to search for the cheapest areas to rent in Adelaide.
You also should calculate your rent to know which rental property best suits your budget. Thankfully, there are several effective ways to calculate your rent.
Determining Rent in Adelaide
Understanding how your landlord came up with your final rent bill is important before you rent the house so that you can be completely sure that you can afford it. You need to be sure that the amount falls within your budget so that it doesn’t become difficult for you to raise the rent a few months down the line. Although rent calculations are quite simple, there are several important provisions of your rent you should be aware of before you start calculating.
The Rental Rate as Amount/SF/Year
If you’re renting a commercial property, your rent will be calculated as dollars per square foot per year, e.g. $20/SF/Year. So, to get your actual monthly rent, you should multiply this rate by the square foot of the house and divide the number by twelve. For example, if the rate is $30 per square foot and the house is 5,000 square feet, you simply multiply $30 by 5,000 to get $150,000 per year. Then, divide $150,000 by twelve months to get $12,500 per month.
Although this calculation seems straightforward, it can often be complicated, depending on the type of rent you’re calculating. For instance, full-service leases are the easiest to calculate because they’re forthright; however, calculating rent for triple net leases might be difficult for you because you have to include several important charges like the operating costs that the landlord charges for the property.
Full-Service Lease
A full-service lease involves a rental rate that comprises the operating cost of the building. Therefore, the total amount is quoted as one number, which combines the base rent and the operating cost. Sometimes, the full-service lease will comprise an operating cost stop, which shows the maximum amount that the landlord wishes to spend on the building. In this case, any overage will be charged back to the tenants as an end-of-the-year reconciliation.
Triple Net Lease
A triple net lease is a rental rate that only covers the property rent. So, you’re required to pay all other costs, including taxes, insurance, and maintenance. These extra expenses are paid separately as the operating expense rate. This rate is normally quoted as $/SF/Year.
For example, if your triple lease rate for a 5,000-square-foot house is quoted as $25/SF/Y and the operating cost is quoted as $8/SF/Y, you need to multiply $25 by 5,000sq to get $125,000 per year. Then, divide $125,000 by twelve months to get $10,416.67 per month.
You also have to calculate the operating expense charge by multiplying $8 by 5,000 square feet to get $40,000 per year. Then, divide $40,000 by twelve months to get 3,333.33 per month. So, to get the total monthly rent, you need to add $10,416.67 to $3,333.33 to get $13,750. You also have to add sales tax to $13,750. The sales tax in Adelaide is 10%, so, the total monthly amount will be $13,750 + 10% = $15,125.
As you calculate the price of renting retirement units in Adelaide, you need to consider the annual increments included in the annual lease. The lease will have a clause specifying the percentage or amount by which the rental rate will increase every consecutive year during the term of the lease. So, if your rent will increase by 3% every year, you should adjust the rental rate from the previous year by 3% to get the monthly rate for the following year.
