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Buyers of rented properties primarily acquire a capital investment. Therefore, the value is primarily determined by the achievable or actually agreed rent, not by the pure potential for owner-occupation.
If the current rent is significantly below the local comparative rent and termination for personal use or due to tenant protection provisions is barely enforceable, this is accounted for by a deduction.
For condominiums, a further distinction is made as to whether owner-occupation after the tenant moves out is realistically foreseeable – this can in turn reduce the deduction.
The creditworthiness of the current tenant as well as the remaining term of any existing graduated rent or index-linked lease agreement also factor into the assessment of sustainable earning power.
In the case of particularly long-term leases that are significantly below market level with no realistic adjustment options, the value discount compared to a freely, market-appropriately rentable property can be considerable.