Rent Price Policy in Peru
Why do I almost pay the same than in my country?
The Global Property Guide (www.globalpropertyguide.com) provide the following information that, in fact, it is similar to the Peruvian market information:
- Square meter value in Miraflores: US$ 1300 to US$ 1600
- Annual rental YIELD for appartments (1): 10.56% for appartment of 120 m². It is higher if the appartment is smaller.
It means, that to rent an appartment of 100 m² (average in Miraflores), with 3 rooms, cost:
Appartment Price: [ US$1300 US$/m² ] x [ 100 m² ] = US$ 130,000
Annual Rental Price: [ US$ 130,000 ] x [10.56% annual ] = US$ 13,720 (Annual Rental)
Monthly Rental Price: [ US$ 13,720 ] / [ 12 months ] = US$ 1144 (Monthly Rental)
Monthly Rental Price per room: [ US$ 1144 ] / [ 3 rooms ] = US$ 381 (s/. 1030 Peruvian Soles)
General Rental Conditions for appartments in Peru
(For APU Rental Conditions, please check our Terms & Conditions link)
To keep rentals prices above, you must meet certain conditions. You can verify this information by calling any appartment offer in Urbania.pe. The rentals conditions are:
Contract Duration: MMinimun duration of 6 months. The majority of owners require 1 year.
Cancellation Policy: Contract are not able to be cancelled. There is always a penalty call "Lucro Cesante" (loss of earnings) that has to be pay if you cancel any contract. This "Lucro Cesante" is regulated but the Peruvian Civil code.
Damage Deposit: MMostly, owners require 2 months as damage deposit, so that they can assure the "Lucro Cesante". But there is possible to find owners that require 1 month as damage deposit. In some cases, a guarantor is required.
Charges are not include: According with the Global Property Guide, this price should include all expenses, taxes and services. But as you can see on Urbania.pe almost all the appartments do not include any charge on the monthly rate.
Fixing Rental Prices for Monthly Contracts or International Student Type of Contracts.
To calculated these prices, we have to consider the following information:
For the same appartment in Miraflores, 100m² and 3 rooms:
- Owners are expecting to make US$13,720 as their annual profit.
- The average international student needs a room 5 months or less (1 academic semester, then they start to travel). International students that stay 2 semesters, need the room 10 months or less.
- The occupancy rate is in the best situation 10 months per year.
It means that the owner have to make US$13,720 in 10 months. If not, it is better for the owners to rent by the tradditional rental system with fix contract of 6 or 12 months, and the "lucro cesante" clause.
Using all this information, we can calculate what will be the Monthly Contract rental rate:
[ US$13,720 annual profit ] / [ 10 months available to generate incomes ] = US$1372 per month
[US$1372 per month ] / 3 rooms = US$457.33 per room per month.
The APU Role in this scenary.
So that we can get better prices, our role is based in the following actions:
- To look for owners who valued their property below the market, or that are able to sacrify incomes by the security that their tenants are people who anyway will leave the appartment. So that they reduce the risk to have legal issues.
- To increase the ocupancy rate, looking for tenants during the law season so that this incomes can be redistributed as discounts of the monthly rate.
- Develop a network of business partners so that you can have saving in other part of your monthly budget.
Is there any way to find cheaper rates?
Sure! there is always possible :) You can look for owners or people who is already renting a place, and have free rooms in the property. For them, there is a sunk cost in the fact that they are already renting or owning the place. So they will be able offer you better prices.
But, rentals conditions or house/flat rules could be different than in student houses. Or maybe not, but in fact, this is an important issue that you have to ask, if you want to use this kind of places to live during your time in Peru :)