How much rent can a landlord expect in Tirana?

If you want to buy real estate as an investment in Tirana, it matters a lot how much monthly rent you might achieve. Above picture is taken close to Pazar i ri facing the east. While the monthly rent in the apartment we are standing in might be 6 EUR per squaremeter (EUR/sqm), the rent of the apartments farther away might be as little as 1.5 EUR/sqm. In this post, we will take a closer look how you might get the highest rent possible.

What we did and what you need to know

For this blog post, we again have taken a sample of 170 apartment prices all over Tirana. If you have missed it, in our previous post we wrote about how much apartment you could buy for 100.000 EUR. This time, we did not sample the buying prices per squaremeter (sqm), but the rent per squaremeter. Not only that, we as well have recorded the year of construction, how the apartment is furbished, and the location.

We have analysed the monthly rent, year of construction, and kind of furniture for 170 apartments in Tirana.

Some might wonder why we have collected this data. First of all, we have identified in the previous post that the year of construction greatly influences the price of the apartment. We check if the same is true for rents. Then, while in some countries you might even rent a condo with neither floors nor a kitchen in it, in Albania these are must haves. Indeed, most most apartments in Albania are rented with furniture. This, the rent should reflect. Throughout this article, we will look at all these factors in detail.

Overall: how much rent is possible?

Before we go into the details, though, let’s start with an overview over the general pricing situation in Tirana. On average, a landlord can expect 5.4 EUR/sqm for an apartment. However, this number is a bit skewed by some few high-priced apartments and many low-priced ones. The lowest rent in our dataset is 1.2 EUR/sqm. The highest possible rent is well above 13 EUR/sqm. The median rent is 4.8 EUR/sqm – this means that half of the apartments have a lower rent and the other half of the apartments have a higher rent.

The lion’s share of monthly rents in Tirana lie between 2 EUR/sqm and 13 EUR/sqm. On average, the rent is close to 5 EUR/sqm.

The chart below shows the distribution of the rent prices in EUR per squaremeter (EUR/sqm). On the x-axis (bottom line), you can see the price in EUR/sqm. On the y-axis, you see the percentage of apartments which are offered for that price. For example, 22% of the condos in our sample have been offered at a price between 4.01 EUR/sqm and 5 EUR/sqm. If you hover over a bar (or click if you are seeing this on a mobile), you see how many of the apartments are offered for a lower rent.

If you look closely at the chart you might come to realize two things: more than half of the rents in Tirana are in the range of affordable 2 to 5 EUR/sqm. However, rents over 9 EUR/sqm are far from uncommon.

Looking at statistics from Eurostats, though, it seems like the average price of 5 EUR/sqm seems to be in line with what they report. If we estimate a two bedroom apartment with 100 sqm, then a rent of 500 sqm is close to the 580 EUR Eurostat lists.

Be aware that we write this article from the viewpoint of the landlord. A tenant will pay more than that per month. Not included in this number are the monthly payments for heat, electricity, water, and for the administration of the building. All these costs are paid for by the tenant. So a 500 EUR rent might lead to costs for the renter of about 600 EUR.

Factors that drive the rent

It is time to get into the details about what makes the rent in Tirana. Of course, there are many factors that influence it. The view, floorplan, and the availability of a parking spot account for a decent amount of rent variation in any city. What always propels the rent forward is if the apartment to rent is situated in a nice, guarded, private residence area or if the apartment is part of a complex building with fitness studios, cafes, and even pools.

However, we could not measure such features reliably. What we could measure reliably were the year of construction, the geographical location, and the kind of furniture.

We investigate the effects of the year of construction, furnishment, and locations on the monthly rent in Tirana.

The influence of furniture on the rent

We categorised the 170 apartments sampled within Tirana into five groups. (1) None/No furniture means the apartment has only a kitchen and a floor. (2) Simple means only the very essentials are in the apartment (or it is an ugly basic furnishing). A tenant can expect a bed, a wardrobe, a kitchen table, a sofa, and both a washing machine and a TV in the apartment. (3) Basic means that, besides the simple equipment, there are some feelgood extras or there is just more furniture. (4) Extra we used for apartments which offer on some parts a feeling of luxury. Often, there are well-sought out indirect lighting solution or high quality fabrics. (5) Luxury – these homes have been most probably designed by an interior architect. They are gorgeous and are on par with all European capitals.

We distinguish apartments with no, simple, basic, extra, and luxury furniture.

The pie-chart below shows at first the distributions of how the apartments are furnished in our sample. 39% of all apartments in our sample from Tirana are furnished in a basic way. Only 5% of all apartments are furnished in a luxury way.

If you hover (mobile: tap) on any of the slices of the pie-chart, you see how much tenants pay extra for a good furnishment. With no furniture, the median rent is 4 EUR/sqm. Basic and simple furniture taken together yield an additional 1 EUR/sqm per month. (If you look closely, in our data, simple furniture achieves higher rents than basic furniture. This is not logical, but that’s the data.) If you go to the luxury furnishment, then the rent doubles. Luxury furnishment yields about 10 EUR/sqm.

The difference between an apartment in Tirana with no furniture and luxurious furniture is about 6 EUR/sqm. In other words, furnishing your apartment luxuriously earns additional 6 EUR/sqm.

The influence of the year on the rent

The next analysis is a bit disheartening. We analyzed the monthly rent according to the year of construction of the building. It seems, though, as if the year of construction is no influence.

The year of construction seems to not be an influence on the monthly rent of an apartment in Tirana.

In the chart below, you see on the x-axis (bottom) the year of construction. On the left side, you see the rent as EUR/sqm. If you hover (mobile: tap) over a point in the chart, you see how many apartments in our sample had this year of construction. [We have excluded the years prior to 2000 because there were barely any in our sample.]

However, this analysis has to be taken with a grain of salt. We have an unlikely number of apartments in 2000 and 2010. It might be that these are not be the real dates of consructions. In other years, for example, in 2002, there are not enough observations to really identify a trend. Still, if we take into consideration only the years for which we have sampled more than 10 apartments, there is no price trend evident.

Surprisingly, tenants might not value the added comfort and cost savings a recent year of construction brings with itself.

This is against of what we expected. Like in our previous post about the real estate prices, the year of construction plays a crucial role in Tirana. If the building is rather old, the overall building quality is overall lower. Most likely, tenants will have to spend a lot on cooling and heating. Too, in older buildings a janitor and an administration is almost always missing. If something is broken, the community has to fix issues on their own without intermediaries. In our dataset, though, tenants seem to either not value this comfort or the market does simply not reflect this.

The influence of the location on the rent

The biggest influence on the rent is the location. The most expensive rents are for the apartments in the center of Tirana. The quarters with the highest rent are Blloku (11.5 EUR/sqm), Downtown (9 EUR/sqm), and Air Albania (8 EUR/sqm). This is not surprising, since most shops, restaurants, businesses, institutions, universities, schools, etc. are located there or nearby.

A special mention deserves Farke with 9 EUR/sqm, too. It is there that some many luxury villas have been constructed in the last years.

The lowest rents are achieved in Fresku (2 EUR/sqm), Kinostudio (3 EUR/sqm), and Kombinat (3.5 EUR/sqm). There, renters face the usual trade off. They spend a lot of time commuting but pay significantly lower rents. The supply of condos is larger, too.

The highest rents in Tirana are paid in the urban districts of Blloku, Downtown, and Air Albania. The lowest rents are paid in the outer districts Fresku, Kinostudio, and Kombinat.

As in our previous post, we have created an interactive map. Below, you can see that we separated Tirana into 34 circles. Each circle has a color. The more “red” a circle is, the higher the rent. The more “white” a circle is, the lower the rent. If you hover over (mobile: tap on) a circle, you will see a little tooltip. In it, we listed the range of the rent in EUR/sqm. As well, we tell you how much a landlord will receive for an apartment of 100 sqm.

We already wrote in our previous post why the prices vary so much between the center and the other districts. In a nutshell, the center offers all you need, both for living and for working. If you live not in the center, you have to take into account endless traffic jams and nerve-wracking commutes. Prices clearly reflect this.

Behind the scenes

Before we make our closing remarks, we would like to give some more details about the data. For every of the 34 districts we tried to collect 5 different samples. We tried to only sample the rents for apartments. When this was not possible, we looked at the prices of offices. Whenever possible, we tried to exclude prices for single houses or villas.

We collected five samples in each of the 34 zones in Tirana. When there were not enough apartments offered for rent, we looked at the rent of comparable office spaces.

When the rent was given in ALL (the Albanian national currency), we calculated the monthly rent using an exchange rate of 120 ALL = 1 EUR. This was the case in less than 5% of all apartments.

Lastly, we only considered the actual living area (AL: siperfaqja bruto) and not the overall area (AL: siperfaqja neto). The actual living area is the space you can actually use to live in. The overall area is as well area that is not part of the apartment but accessible to everyone. Typically, these might be community areas and even the common house floor. In Albania, people always talk about the overall area. The difference between both is about 10%.

Closing Remarks

This has been the second article in our series about real estate. We have identified two key drivers of the monthly rent: furnishment and location. Similar to the previous article about the real estate buying prices, the rents are highest in the centre. With no furniture in the apartment, you might lose about 1 EUR/sqm. With luxury furniture, you might currently win an additional 5 EUR/sqm.

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