What makes old house rentals so different?


The rental value of renovated colonial properties are far harder to compare as the rental price per sqm varies hugely depending on location, renovation, private outdoor space, furniture and size.

This is also true for new build properties, but the variation is by no means as large. The comparison below is a good example of the diversity of colonial properties:

Property A of What makes old house rentals so different

Property A: Colonial lane house in Jingan district, 270sqm, 2 large bedrooms, 2 study rooms, a family style attic, and 2 full bathrooms, western kitchen, 15sqm garden and 10sqm roof terrace – rented for RMB20,000/month.

Property B of What makes old house rentals so different

Property B: Colonial apartment in Xuhui district, 95sqm, 2 bedrooms, 1 bathroom, 100sqm garden – rented for RMB20,000/month.

What makes these two properties so different enabling one landlord to get almost 3 times the rental yield per sqm? The key-factors can be summarized as follows:

Renovation quality of colonial properties plays a huge factor in the rental price.

This year we have noticed more than ever the differences between newly renovated colonial properties and those renovated over 3 years ago. Property B for example features radiators, double glazed windows in ‘colonial’ style, newly installed wall insulation, flooring to keep out noise and moisture, a water filter system and mosquito nets.

Property A was renovated nearly 5 years ago.

Although at the time the renovation standard may have been of a high quality it is now already lacking many of the ‘perks’ that recently renovated properties contain. Property A on the other hand only features A/C heating, resulting in poor heating quality in the winter. This is compounded by original colonial windows which look great, but are only 1 paned. Property A further has no water filter system and the property suffers from the standard damp problems often associated with renovated colonial properties.

Location is another key factor. Property A is in Jingan and Property B is in Xuhui.

Xuhui is the most expensive leasing area per sqm for colonial properties. Many expatriates love the charm of the former French Concession and are willing to pay more in order to walk out of their properties and into the quaint, tree-lined streets.

Outdoor space is always important.

Although Property A has a small outdoor space, Property B’s outdoor area is more user-friendly as it is located on one level only. This situation again attracts young couples or singles with a company budget.

Finally, personal preference and wish for individuality play a deciding factor in the rental price of a colonial property.

A modern high-rise building often features 50 to 100 identical apartments, making it possible to compare rental prices directly and easily. With Colonial properties however no two objects are the same, even if they may be similar in layout. This obviously attracts many tenants, however it also means that it is virtually impossible to make an exact rental price comparison between these kind of properties.

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