Do you wish to sell a building or an apartment? But not the piece of land where the structure is built on? Knowing how to calculate your ground rent will determine how quickly you can put up your building for sell. As you read on, you’ll learn steps that will guide you on calculating your ground rent.
If you are into real estate in the UK, you would be familiar with the term “ground rent.” In case you don’t know, it is the rent paid to a landowner where a structure or building sits or lies. The main purpose is not to yield instant financial returns. It brings increasing land values from the rise of the ground rent over time. The process of calculating the ground rent have not been uniform in the past. Lately, due to a high number of cases arising from the ground rent scandal, the government and other big players are looking for ways to unify the process. One of such ways is that ground rent interest will remain unchanged for at least a 10 year period. Another reason why the ground rent scandal became a national discuss was because its interest usually doubles averagely every 5 years.
Now, let's go through each step:
1. Measure the dimension of the land: Take measurement of the dimension of the parcel of land you wish to rent with the use of a tape. Draw or sketch the land and write out the dimensions you have measured.
2. Divide into shapes: After doing a rough sketch of your land, divide into triangles, rectangles and squares. Peradventure you have a perfectly squared or rectangular shape, it's not necessary to divide again.
3. Find the area of each shape: For squares and rectangles, multiply the length by the width to find the area. For triangles, multiply the base by the height and divide by two.Then add all the areas of the different shapes to find your square footage.
4. Set an amount per square foot: Decide what to set as the price per square foot. Multiply by the square foot to obtain your ground rent. But If you are not sure of what to set, you might want to check out competitive prices. Check with few local estate agent.