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Cold rent or hot rent?

09.11.2016

 “Cold rent” or “hot rent”?

These concepts have been used for a long time on the real estate market from abroad (warme Miete and kalte Miete) and, more recently, in our country. They provide for the situations when the value of the rent for a certain property include the expenses related to its utilities.

Cold rent.
Cold rent only includes the amount owed to the owner, based on a tenancy agreement, strictly covering the accommodation for a certain period of time. Why cold rent? Because, in this case, the contract states that the other utilities, namely the consumption of thermal heat, electricity, television services, fixed telephone services or sanitation, shall be paid separately, corresponding to the extent to which they are used, upon receiving the invoices.
In this case, the rent can be lower, but the amounts paid for utilities may increase the tenant’s effort to a considerable extent. Also, if a contract with a bank does not exist, which charges such expenses directly from a card or by using an automated teller machine, the tenant wastes a lot of time to pay them.
It is also true that there have been occasions when the landlords, after terminating the tenancy agreements, were left to pay the outstanding invoices of the former disloyal tenants.
To avoid such inconveniences, the owners who want to rent a property have lately resorted to the “hot rent” option more frequently.

Hot rent.
In this case, the owner claims a fixed monthly amount from the tenant, during the entire contract term, regardless of the season, which includes the rent proper and the payment for all utilities.
Thus, the landlord and the tenant are in a win-win situation. The landlord is at ease concerning the debts to the utility provider, as he/she will personally take care of their payment. The tenant is also free of the burden of the invoices, as he/she pays to the landlord the value established in the tenancy agreement, once a month. It is true that this value is higher than in the case of cold rent, but, most often, the cumulative financial effort, in the hot rent scenario, is smaller.
By resorting to the “hot rent” option, both contracting parties’ physical and mental comfort improves.

The New Concept Living Real Estate Agency will help you reach the best decision



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