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Danish rental housing site Boligportal gets record profit

The BoligPortal platform, on which would-be tenants can search and apply for rental properties across Denmark, has registered profits over 100 million kroner for the first time.

Published: 8 April 2024 12:39 CEST

Danish rental housing site Boligportal gets record profit

Danish rental housing platform Boligportal has increased revenues. Photo: Ida Marie Odgaard/Ritzau Scanpix

The company’s annual results for 2023 showed an increased in profit of 14 percent, landing at 107 million kroner for the year.

A key revenue source for the platform is its subscription model for users who want to see the full details of listings and contact landlords.

Around 100,000 people found a home through BoligPortal last year according to newswire Ritzau.

READ ALSO: Five common rental scams in Denmark and how to avoid them

Other sources of revenue for Boligplatform include sale of market data, including through an agreement with real estate lender Nykredit.

Boligportal CEO Anders Hyldborg said he envisaged a high level of potential for developing this side of the business.

“We have a unique data basis which is getting stronger and stronger on all parameters. We have most recently agreed a deal with Nykredit, who want to assess the value of business properties and analyse the rental market more precisely,” Hyldborg said.

“Their new property valuations will become more streamlined and objective and will draw on live data,” he said.

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EXPLAINED: The four ways your rent can be regulated in Denmark

It can be fairly tricky to determine which of the following systems should be used to regulate a fair rent for different apartments, Mogens Dürr, a lawyer who advises landlords in Denmark, told The Local.

“You can’t choose which system you want to use. That’s determined in the law, but it’s quite difficult to differentiate between the categories of real estate.”

Free market rent

In order to incentivise building companies to erect more rental apartments, most privately owned properties taken into use since the start of 1992 have not been subject to rent controls. This means the owners of most of the trendy harbourside developments in Copenhagen and Aarhus can charge whatever they can find someone willing to pay, with few controls.

You can check when a building is considered to have been completed, or opført, by putting in the address in Denmark’s searchable Building and Housing Registry (BBR).

Attic conversions, loft conversions, and warehouse conversions are also often subject to free market rent, even if the building was built before 1992, with Copenhagen Municipality, for instance, exempting attic conversions which were not used for housing before September 1st, 2002, from rent controls.

READ ALSO:

Cost-based rent

Cost-based rent, called omkostningsbestemt husleje, is the simplest way of determining the rent a landlord can charge you under rent control laws, and is most commonly used to set rents for apartments in properties built before 1992 in municipalities which have not opted out of the Housing Regulation Act, or Boligreguleringsloven.

Essentially, the landlord is supposed to add up all the operational and maintenance costs of running the apartment and then add a profit margin based on a seven percent return on the value of the property.

Cost based rent generally applies in properties in regulated municipalities which had more than seven tenancies on New Year’s Day 1995.

Leased value

This, called lejedes værdi, is an alternative system which allows landlords to charge the rent they think is reasonable. This is the method used in the municipalities which have opted out of the Housing Regulation Act, and also to determine the rent for properties that had six or fewer tenancies on New Year’s Day 1995.

Municipalities in Denmark which have opted out include the Copenhagen suburb of Greve, and the Zealand town of Fredensborg, meaning rents there are only regulated under the weaker Tenancy Act or den almene lejelov.

Other municipalities which have opted out include Billund,

Ikast-Brande, Herning, Holstebro, Læsø Mariagerfjord, Rebild, Ringkøbing-Skjern, Samsø, Solrød, Struer, Thisted, Tønde, Varde, Vesthimmerland, and Ærø.

“It’s the owner who sets the rent when he makes a contract with a tenant,” said Mogens Dürr, who advises landlords in Denmark. “If he aims too high, he’s got a problem and if he aims too low, he’s got a problem too.”

He said that judging a fair rent was based partly on knowledge of the market in the area where the property is situated, but also on studying cases where tenants have taken rents they consider unfair to the rent board and received a judgement.

Section 5 paragraph 2

Landlords can increase rent considerably if they make significant improvements in the property under Section 5 paragraph 2 of the Denmark’s rental law. Dürr said it was then possible for landlords to strike a deal with tenants that rent increases in future should instead be determined by an external price index.

In 2024, the minimum investment to count as “significant improvements” is 2,497 kroner per m2 or a total of 295,515 kroner, but the number is updated every year.

A few years ago, concern about companies using this section to increase rents led to the then government to bring in the so-called Blackstone-indgrebet, or “Blackstone Intervention”, named after the US investment giant, which was accused of buying up properties across Denmark and using this section to push up rents.

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