It’s important to stay ahead of the competition as the owner of a single-family rental property right now because of the state of the economy. Every so often doing a rental market analysis is a good way to do this. A rental market analysis might be useful if you want to purchase rental property or if you already own rental property and are handling it.
A thorough market analysis may assist you in determining an accurate rental rate for each property in addition to informing you of what your competitors are doing. I’m going to talk in great depth about how to do a good rental market analysis next.
Research the Neighborhood
The first step is to gather data. It’s important to think about the average rental prices and vacancy rates in the area. To do this, find a local real estate agent or search online. You will have a better idea of your competitors after reading this.
Also, it’s important to carefully evaluate the neighborhood where your property is located. Things to consider include the area’s general walkability, the quality of the schools nearby, and the convenience of nearby stores. Check out how well the streets are kept up and how many homes appear run down or vacant. You can set a rental rate using this information and how desirable an area is.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Find out the square footage of the property, the number of bedrooms and bathrooms, and any other features that make it stand out. In the same area and size, a property that has been well maintained will command a higher rent. For more information, you can look at the pictures or go see each property for yourself.
Age, general health, and wear and tear are some other things that affect rental rates. If you want to know how the rental market is doing in your area, compare the lists of homes that are close to where you live. Last but not least, find out how much each property rents for now. To find this information, you can speak with the tenant, search online, or contact the owner or existing property manager.
Calculate the Average Rent per Square Foot
To determine the value of your property in the current market, obtaining the necessary information is critical. A very important step that takes a lot of work is finding the average rent per square foot.
To get the most exact results, you should add up the square footage of all comparable properties and then divide that number by the total number of units. This is a way to find the average price per square foot in the area. It’s important to make sure that comparable properties have the same age, size, location, and amenities as your own property.
If you add the average rent per square foot by the property’s total square footage, you can get an idea of how much rent you can charge each month. Keep in mind that the exact cost will depend on the features and location of your property.
Adjust Your Rate as Needed
Some other things, though, could mean that you need to change your rental rate. If your property is in better condition than the others in this situation, you might be able to charge more. You might be able to get a higher rent for some properties because they have better features or services or are in a better place.
If the rental rate you want to charge now will still be competitive in a short time, take a look at the current state of the economy. Choose the rental rate based on what you know and what you think is the best deal.
In order to keep up with the rental market, you should do a market analysis every year. This will help you stay ahead of the game and keep your property busy.
Real Property Management Trusted Hands knows a lot, so you can believe what they say. We can give you the most accurate rental market analysis in Kissimmee and the surrounding areas because we have private industry data at our fingertips and have been working in this field for years. Contact us online or at 407-794-7468 if you need to talk to us or get a free market analysis of your house.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
