A Study on Influencing Factors on the Monthly Rent of Private Residential Units Managed by Rental Housing Management Company

Abstract

Recently, the attentions to the rental housing business are increasing rapidly. The business environment such as the surge of one person households, preference change from ownership to rent in housing market, paradigm shift from price appreciation to operation income and so on, is transforming rental housing into a major business area in real estate industry. The government has been also preparing policy such as private rental housing management company, New Stay, and so on, to support private rental housing business. This paper attempted to explain the influencing factors on monthly rent of rental units managed by private rental housing management company. Specifically, this study analyzes monthly rent of 1,028 residential units in Seoul by using hedonic price model. This study classified influencing factors into regional, locational, rental building, rental unit, and management characteristics. The empirical result shows that monthly rents are influenced by region and locational characteristics. This study finds out that building characteristics such as housing type, building age, piloti area, and number of parking lot per unit have significant effect on monthly rent. And rental unit characteristics such as unit size, unit type, the floor it is located has significant effect on monthly rent. With regard to rental housing management, this study shows management efforts such as remodeling of building, installment of CCTV, installment of home appliance and furniture, and so on, can significantly increase monthly rent.