The Nexvia real estate agency, founded in Luxembourg in 2016 and offers its clients expertise covering tax and finance, has developed a rental estimator; the development came about in answer to the question: can you set any rent?
As background to this development: in January 2020, a tenant living in Limpertsberg started a procedure, hoping to lower his rent by 35% thanks to a relatively unknown law. This led Nexvia to develop an estimator that calculates not only the market rent for a property, but also its maximum legal rent.
This estimator can give the rental value of the user's property. The simulator analyses more than twenty objective variables, allowing the algorithm to calculate a precise range of its rental value.
What about the legal cap on rent? "This will depend on how the property is qualified" explained Pierre Clement, CEO of Nexvia, during the tool launch. "The law regarding residential rentals is clear about a 5% cap of the invested capital, revaluated and discounted according to several criteria. For furnished property, the cap is 10%. However, if a specific lease has been signed, property qualified as “Luxury” is not subject to the same constraints."
Nexvia's rental estimator not only allows its users to calculate the legal rental cap, but also to find out if the property meets the conditions to be qualified as luxury property. The tool brings transparency on this poorly known point of law, both to landlords and tenants.
On the impact of the Covid-19 on real estate, Romain Aubrée, Head of Sales at Nexvia, commented: "If buying is also a choice of investment, the need for housing is motivated by family or professional constraints. The main employers in the Grand-Duchy are solid and have proven resilient to different crises in the past." It should also be noted that, compared to other capitals, there is a relatively low volume of Airbnb-type short-term rentals in Luxembourg. This should limit the risk of seeing a sudden increase in long-term rentals on the market.