Rental Pricing Guide: Value, Depreciation, and Duration

  1. 5% of Product Value (Short-Term Rentals):
  • For short-term rentals (daily or weekly): Consider using 5% of the product’s value as a starting point for rental pricing. This percentage might be suitable for high-value items for short-term use.
  1. 10% to 20% of Product Value (Medium-Term Rentals):
  • For medium-term rentals (monthly or bi-monthly): Use a range between 10% to 20% of the product’s value. This range is suitable for items with moderate value and intended for medium-term use.
  1. 20% to 30% of Product Value (Long-Term Rentals):
  • For long-term rentals (yearly or longer): Consider using a range between 20% to 30% of the product’s value. This range might be applicable to items with lower values or higher depreciation, intended for extended periods of use.

Factors to Consider within Each Range and Duration:

  • Depreciation: Higher depreciation items for shorter durations might still fall within the lower percentage range, while long-term rentals of items with lower depreciation might lean toward the higher percentage range.
  • Market Demand: Adjust the percentage within the range based on the duration of the rental. Short-term rentals might allow for a slightly higher percentage within the same value bracket due to the convenience factor.

Example Scenarios:

  • Short-Term: A high-value camera (EGP60K) for a weekend rental might be listed at 5% (EGP3K) or slightly higher, depending on market demand.
  • Medium-Term: A moderately priced bike (EGP25K) for a monthly rental might be rented at around 15% (EGP3,725) of its value, considering average depreciation.
  • Long-Term: A lower-priced musical instrument (EGP6K) for a yearly rental might be listed at 25% (EGP1500) or slightly lower to attract long-term renters while covering costs.

Always reassess and fine-tune the rental price based on market trends, competition, and the specific characteristics of your product while factoring in the intended rental duration to optimize the listing’s performance on the rental marketplace.

Determining Security Deposits:

  1. 25% Security Deposit:
    • For lower-priced items or shorter rental durations: A 25% security deposit could be appropriate. This deposit percentage might suit items with lower values or those rented for shorter periods.
  2. 50% Security Deposit:
    • For moderately priced items or average rental durations: A 50% security deposit might be suitable. It can apply to items with moderate values or standard rental durations.
  3. 100% Security Deposit:
    • For higher-value items or longer rental durations: A 100% security deposit ensures full coverage of potential damages or losses. It might be applicable to high-value items or rentals spanning longer periods.
  4. 200% Security Deposit:
    • For extremely high-value items or very long-term rentals: A 200% security deposit could be considered for items of exceptional value or rentals that extend over extensive periods to mitigate any potential risks significantly.

Factors to Consider for Security Deposits:

  • Value of the Item: Higher-value items might warrant a higher security deposit to cover potential damages or losses adequately.
  • Rental Duration: Longer rental durations might necessitate a higher security deposit to ensure coverage for extended use.
  • Item Fragility or Susceptibility to Damage: Items prone to damage might require a higher security deposit percentage to mitigate risks.

Example Scenarios:

  • 25% Deposit: A lower-priced camera rented for a short duration might require a 25% security deposit (EGP250 for a EGP1000 rental).
  • 50% Deposit: A moderately priced power tool rented for a standard duration could have a 50% security deposit (EGP500 for a EGP1000 rental).
  • 100% Deposit: A high-value electronic device rented for an extended period might require a 100% security deposit (EGP2000 for a EGP2000 rental).
  • 200% Deposit: An extremely high-value piece of machinery rented for a very long term might necessitate a 200% security deposit (EGP800 for a EGP400 rental).