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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