Value
Letting potential
The extent to which a property can be let quickly and at a market rent.
Letting potential is determined by location, accessibility, layout flexibility, energy rating and the condition of building services. A property that is difficult to let requires a higher yield and therefore a lower purchase price.
See also
Commercial property valuationFrequently asked questions about Letting potential
What does Letting potential mean?
The extent to which a property can be let quickly and at a market rent.
How does Letting potential work in commercial real estate?
Letting potential is determined by location, accessibility, layout flexibility, energy rating and the condition of building services. A property that is difficult to let requires a higher yield and therefore a lower purchase price.
Related terms in value
Gross initial yield
Gross rent divided by the investment.
Net initial yield
Yield after deducting the owner's expenses.
Commercial property valuation
Formal valuation by a valuer.
Rental capitalisation method
Valuation method based on rental income.
DCF method (discounted cash flow)
Valuation based on future cash flows.
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