HOW TO CALCULATE RENT OF BUILDING




As a civil engineer compulsory we want to know how to calculate rent of building like  residential commercial  etc .so in this topic i will share some examples for how to calculate the annual rent and monthly rent of buildings.

EXAMPLE 1

CALCULATE THE ANNUAL RENT OF BUILDING WITH THE FOLLOWING DATA

Cost of land          =   RS . 30000
Cost of building    =  RS. 900000
Estimated life       =   60 years.
Return expect      =   5 % of land and 6% on building.


Annual repairs are expected to be 0.8 % of cost of construction and other outgoings will be 25 % of gross rent .there is no proposal to set up a sinking fund.

Amount of return required on land @ 5 % of 300000         =  RS   15000
Amount of return required of building @ 6% of 900000    =  RS   54000

Net income   =     15000 +54000
                        =69000

Let cross rent per annum   =     X
Amount of annual repair   =   0.8%
                                                =   0.8 x 900000

Amount for other repair    =   0.25x
Net income   =   gross income  –  outgoings
69000   =   X – 7200 – 0.25 X
69000   =   0.75 X – 7200
0.75 X   =    69000 + 7200
              =     76200
              =     101600 per annum
Rent per month   =    101600 / 12
= RS. 8466 or 8500


EXAMPLE 2

CALCULATE THE ANNUAL RENT FOR BUILDING WITH THE FOLLOWING DATA

Cost of land           = RS  500000
Cost of building    =   RS 1000000
Estimate life          =   55 years
Return except       =    5% of land and 8 % on building

Annual repairs are expected to be 0.6 % cost of construction and other outgoings will be 25 % of gross rent .there is no proposal to set up a sinking fund.

Amount of return required on land 5 % of 500000   =   RS 25000
Amount of return required on building @ 8 %           =   RS 80000
Net income    =   25000+80000
                          =105000
Let cross rent per annum    =    X
Amount of annual repair    =   0.6 %
                                                 =    8000
For other outgoings             =   0.25 X
Net income       =       gross income  –  outgoings
105000  =  x – 8000 – 0.25 x
                = 105000 +8000 +0.75 x
0.75 x     =  113000
           X  = 150667 per annum
Rent per month  =  150667 / 12
                              =  12555 / month


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