Rent - how much to charge?

[drnuncheon]

Being as D&D is based around the concept of the travelling adventurer, the PHB includes things like inn costs, which is all well and good - if your PCs are travelling adventurers.

But what if they have a more permanent home? What's more, what if they don't own that home (or storefront), but instead rent it?

What I'm looking for is a simple rule of thumb - maybe something based on the value of the property, like "1% per month" - and, of course, a rationale that's a bit stronger than "it sounds good".

Anyone got any ideas? Suggestions?

J

 

[dcollins]

I apply the upkeep from DMG p. 142 as written, presuming I rental situation is mostly available in an inn-like setting (as a permanent motel). If PCs buy there own building, I reduce upkeep price to one step less expensive.

Those upkeep prices look to be about (food + quarters)x2. It might be justified to say in a long-term situation you can reduce price by half.

 

[Speaks With Stone]

Simple rule of thumb should be 10% of the cost per year. Divide appropriatley for your time period (rounding up) as needed.

This is based on modern investment strategies and all that. No, I have not considered the D20 economic system and the possible vagaries of a comparable medieval society. I only state that this is a reasonable way of handling based on how you'd likely handle it today.

(Sorry if I sound defensive, but in answering similar questions in the past, I tend to get lots of folks jumping in to point out all of the above caveats).

There are lots of ways to fine tune this, but really, just use 10% and you are right on track (and the math is very simple).

Edit: As far as rationale, I am a commercial real estate appraiser and brokers will be using the 10 CAP far into the future (multiply the annual rent by 10) to determine rough indications of value - partly because it's fairly close and partly because it's easy to calculate on a napkin.

 

[Gizzard]

What's more, what if they don't own that home (or storefront), but instead rent it?

I went with one-half to two-thirds of the cost of renting from the Inn - here are two thoughts on this, and one conclusion:

When I think Dark-Ages, I imagine that there was very little rental market. You either owned land or you were a serf on it. If a rental market sprang up in a big city it would still mostly be based on Inns; what class of people needs long-term rental in that sort of world?

I thought that people would be "boarders" more than renters as the society becomes more dynamic. Again, its rather Inn-like in that you rent a room, but it's part of a larger household where your meals (and probably furniture!) are provided.

Conclusion: One thing thats going on in both of these scenarios is that food and furniture is being provided; your 1G doesn't just get you rent. This is good for the DM; that way I dont have to tell the players they feel hungry and RP them dickering with the baker for a pastry every morning. ;-) Players tend to want to rent because they feel it will be cheaper, but I'd rather just roll the whole thing up into one tidy Inn-shaped ball and not deal with the minutia of feeding and clothing them. It also makes me happy that this method stays closed to the DMG (or in my case, Freeport) guidelines - I hope that those guidelines have been roughly game-balanced.

 

[andargor]

When I think Dark-Ages, I imagine that there was very little rental market. You either owned land or you were a serf on it. If a rental market sprang up in a big city it would still mostly be based on Inns; what class of people needs long-term rental in that sort of world?

I have a different perspective of the d20 World. Of course, it depends on your specific Campaign. But if you throw magic into the mix, it can change the historical "equivalent".

For example, the FR setting "feels" more like late Middle-Ages or early Renaissance (without firearms). Hence, there is a strong bourgeois class of artisans and other professionals. Since it's a high magic world, many practitioners of magic are present. And organized magic societies exist, both arcane or divine, which require fair amounts of wealth.

I would see a rental market in such a setting, as this bourgeois class would consider this a cost-effective way of establishing a temporary presence in different parts of the world, instead of investing in property. They would probably prefer rental to having to deal with local landowners (noble born) for property, which also has a political dimension.

Andargor

 

[TheAuldGrump]

Hmm, for an Iron Kingdoms game I came up with a base cost of 2sp/10 sq ft. With a multiplier for quality and location. The PCs are relying on fees for tasks rather than loot from adventuring, so the number may seem a bit low for high treasure games. However they also had to pay first and last month's rent out of the starting funds from the PHB.

The Auld Grump

 

[drnuncheon]

I guess a little more background is always good...

The group is based in Sigil, of Planescape fame - a fairly well-developed city which seems to me to always have the feel of a dark ages New York by way of Charles Dickens. Given that, and the premium on space, renting seems to be fairly appropriate and thematic as a way of having a place to live.

I should have known there was something in the DMG, but it completely slipped my mind. In any case, between that and the Living * campaign's upkeep costs, I think we're OK on the characters, and we just need to figure out the costs for the Market Ward "storefront" that they operate their business out of.

Speaks with Stone, that is exactly the sort of thing I am looking for! Is that rule of thumb only for residential areas, or would it apply to commercial property as well?

Thanks everyone for some great ideas!

J

 

[Drawmack]

I don't know enough about econimics to give specifics but what I would look up is standard mortgage rates vs. prices. Then base rent on that as rent is usually about equal to a mortgage payment in the real world.

Here is an example.

Let's say, just for example's sake, that yearly rent is in fact 10% of the retail price of the property.

This would mean that if you have a store front that cost $12,000 to buy then yearly rent would be $1200 making monthly rent 1200/12 = 100 a month.

Another method would be to base it off of the upkeep costs and standard profit off of weapons, which is detailed in the core books in a round about way.

I'm pretty sure that the raw materials to make something cost 50% of it's retail price. So there is 100% profit. This means that upkeep * 2 = rent. If I remember the percentages correctly.

For an added level of complexity mascarading as realism you can use a section of town modifier. 0.75 for bad sections, 1.0 for average sections and 1.25 for good sections. Multiply the rent by that amount to arrive at the final cost.

 

[Speaks With Stone]

The actual range for rent to income varies quite a bit based on expenses and vacancies and such, but it is unusual to see it too far our of the 8 to 12 percent range, 10 being the standard. It's an ongoing joke in real estate. (Don't feel bad if you don't get it. It's not that funny.)

Residential and commercial should stay in the same range to keep it simple. In real life residential would probably be a little lower because more people are willing to invest in a house or duplex and therefore there are more dollars competing for these investments. I'd ignore this if I were you. The differences are going to be minor.

I'll also point out that this ignores vacancy and unusual expenses for a property. You could increase the rent slightly to account for such things, but for a game I'd stick with the close but not quite. It won't be worth the extra math to mimic real life too closely.

<<I don't know enough about econimics to give specifics but what I would look up is standard mortgage rates vs. prices. Then base rent on that as rent is usually about equal to a mortgage payment in the real world.>>

Actually, that doesn't work exactly. If you want to look at standard mortgage rates and add about 3 percent then you'd be a lot closer. Think of it this way, who would invest in a house and rent it out, if he can't make more money than the mortgage payment? Sure property values are going up, but you have to make up for vacancies and generally folks want a little cash flow as well.

As for why folks rent when they could own for less it generally has to do with either how long they plan to stay in an area, the difficulty in obtaining financing, amassing a downpayment, or reaching the point that they decide to own as opposed to rent.

If you really want something a little more complex, I can generate an excel sheet pretty quick that should cover most of what you need. As for modifying the cost by area of town and so on, that is one of the tricky points for the D20 economics. It doesn't really consider supply and demand (and shouldn't) very well. For variety, just modify the cost and rent as DM deems appropriate for the area.