How much can I take in rent? And what is a fair rent?

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If you are going to rent out a home, it must be rented out at what is called reasonable rent. There are different rules and guidelines on how much a reasonable rent is and it depends on what type of home you rent out, whether it is rented out first or second-hand.

 

Reasonable rent for tenant-owned apartments and villas

When it comes to tenant-owned apartments and villas the rules now differ from a while back in comparison to those for subleasing a tenancy.

When you want to calculate a reasonable rent, you include

  • Operating costs. These costs include e.g. household electricity, water, broadband fees and the fee to the condominium association. It may also include a supplement if the landlord rents out the home furnished. In some cases, the condominium association may also have the right to charge a fee for you to let out, this must also be included in the operating costs.
  • Capital costs. A capital cost for a home is calculated as a reasonable annual rate of return on the market value of the home. This rate of return is reasonable if it is a few percent above the Riksbank's reference rate. An operating cost is related to the actual costs to the landlord, while the capital cost is the estimated cost of having capital invested in the home.

Calculation formula:
Operating costs + other costs + any monthly fee to the housing association + (market value of the home * yield rate)

When renting a furnished apartment, 15% can be added to the rent. Then multiply the calculated rent by 1.15.


Reasonable rent for rented apartments

Homes that are rented out first-hand have a rent that is determined through negotiations between the landlord and the local tenants' association. Here, too, the law is that the rent must be reasonable, this means that it must not be significantly higher than the rent for homes of the same or similar value. You should also note that the utility value rises depending on what benefits there are to the home such as a basement, lift, laundry room and so on.

Homes that are sublet have a rent that is the same as the landlord pays himself. This means that if you rent out, you may only charge the same rent that you pay yourself, with any additions for renting it out furnished.

 

Surcharge for furniture

If the rentable is to be rented out furnished, you may make an addition to the rent for this. There is no regulation on how much extra you can charge in rent, but hyresnämnden does not generally approve fees that are greater than 10-15 percent for a home that is fully furnished. Hyresnämnden also decides this based on specific cases, so these percentages are more of a guideline. It must also be furnished for use, that is, useful furniture and not just a couple of chairs and a sofa in order for the home to be considered furnished.

 

Other reasonable additions

If you have, for example, a parking space or free household electricity that is included, these can be added to the actual cost.

 

If an unreasonable rent is set for a sub-tenancy

In this case, the tenant can, if he considers the rent unreasonable, turn to the Rent Board. It can then decide whether the rent should be reduced and whether it should retroactively pay back the part of the rent that exceeds the reasonable rent.

 


Reasonable rent for a room or live-in

If you rent out a room, it is basically calculated in the same way as if you were to rent out the entire home. So the rent you can demand from the tenant depends on whether it is a room in a rental property or a privately owned residence.

If a room or part of a privately owned home is rented out, the law for renting out one's own home is the one that applies. And fair rent is the total sum of operating costs and capital costs for the home. However, if you only rent a part of the accommodation out or a room, it is not reasonable, according to the hyresnämnden, for tenants to pay an equivalent amount as if they had rented the entire home. So then, determine it based on what percentage of the home you rent out.

Example: If the tenant is to rent one room out of four in a home whose market value is SEK 2 million, the lessor's operating costs per month are SEK 4,500 and the rate of return is 4%, you can calculate the reasonable rent for the condominium as follows:
((2,000,000 SEK/4) x 0.04) /12 + 4,500 SEK/4 = 2,791 SEK

The tenant should therefore not pay more than a quarter of the fair rent for the entire residence.

When renting out rooms to tenants in a rental property, it is the Rent Act that regulates how high the rent is. It must be calculated on what the landlord pays in rent. Residents' rent is therefore determined by what percentage of the home is rented out. If you share the home equally between people who live there, it is reasonable that the rent is divided equally. If it is furnished, you can make a certain addition for wear and tear.

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