What happens if there is no rent index? Easily create and assign comparative groups of properties in SAP®

To determine the legally permissible rental rate or possible rent increases, landlords generally refer to the data in the rent index for a region. In principle, however, landlords are free to use their own comparative group of properties for the calculation instead of the rent index. Also, in some rural regions, there is no official rent index. With our new tool, you can create and assign comparative groups of properties in SAP® in no time at all.

Rent index and comparative groups of properties – when to use which?

In Germany, the rent index generally serves as a reference point for determining appropriate and legally permissible rents. However, especially in rural regions or smaller municipalities, there may be no formal rent index. In this case, it is much more difficult for housing and real estate companies to set an appropriate and, more importantly, permissible rent level. Comparative groups of properties must be defined. For this purpose, at least three comparable rental properties with similar features are grouped together to form a comparative portfolio. If there is no comparable property in the company's own portfolio, corresponding data can be requested from the Federal Statistical Office. The comparable properties used must be identifiable, meaning that the exact address as well as the floor and the name of the current tenant must be stated. Properties that are currently vacant cannot be used.

In principle, the landlord is free to use a comparative group of properties instead of the official rent index to determine the rent level. Normally, the rent index is the preferred assessment tool for the calculation, as it is based on scientific criteria. In some cases, the data in the rent index is only updated and is not compiled again. In such cases, landlords like to base their calculations on comparative groups of properties. We will show you how to easily compile and assign these in SAP®.[1]

Search, create, assign – a comparative group of properties in SAP® in just a few steps

A clear template opens in the Fiori® Launchpad via a “Comparative Groups” tile, in which the source objects are first selected. These are the properties for which a comparative group of properties is to be created. Very specific rental properties can be explicitly selected here. In the same way, you can also select an accounting entity from which only rental properties with a certain number of square metres or fixtures and fittings characteristics are to be included.

You can then select the rental properties from the results list for which a comparative group of properties is actually to be defined. The comparative group to be searched for is then specified. The solution makes it possible to specify the following parameters:

  • Location: Definition of a specific accounting entity or postcode area
  • Size: Specification of a number of square metres with a preset deviation of 10%
  • Age: Definition of the year of construction of the comparative group of properties
  • Fixtures and fittings characteristics: Search for properties with predefined characteristics, e.g. fitted kitchen or floorboards
  • Company code: Restriction of the search to a selected company code

Once all search criteria have been defined, a simulation or real-time run can be carried out. The results list shows the source properties in yellow on the left and suggests three matching comparable properties. The properties with the highest rents from the pool of comparable properties found are automatically suggested. Other comparable properties found can also be selected manually. So what happens to the generated comparable properties?

There are now three options:

  1. Create comparative group: The comparative groups of properties are simply saved and are available as master data in the system.
  2. Assign comparative group: In this case, a comparative group of properties already exists and is simply reassigned to the source properties.
  3. Create and assign comparative group: The comparative group of properties is generated and stored directly in the adjustment clause of the contract for the source property.

Users can also decide whether the comparative group of properties should be assigned to the contract of a rental property or to the rental property itself. If the comparative group of properties has been assigned to a contract, this can be viewed via a separate tab in the contract.

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