You know how important it is to keep up with the times if you’re a single-family rental property owner. One effective strategy for this is to undertake a rental market analysis on a regular basis. Whether you’re looking into the rental potential of a property you wish to buy or are currently the proud owner of one, a rental market analysis will be invaluable.
In addition to helping you determine an accurate rental rate for each property, a competent market analysis will give you insight into what your rivals are doing. Following the techniques outlined in this article will allow you to conduct a reliable rental market analysis.
Research the Neighborhood
The first step is to gather data. You should consider things like vacancy rates and average rental prices in the region. Searching online or contacting a local real estate agent are both viable options for this. You can then learn how your competitors are positioning themselves in the market.
You should also evaluate the neighborhood in which your property is located, taking into account things like the convenience of public transportation, the safety of the streets, the proximity of stores, and so on. Count how many homes appear run down or vacant and whether the streets are clean. How desirable an area is, and hence your rental rate, will be affected by all of these information.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Examine the property’s square footage, the number of bedrooms and bathrooms, and any additional features or facilities. Also, the property’s condition is important to consider because it will command a higher rental price if it is in good shape. It is possible to find this out by visiting each property in person or, if necessary, by seeing photographs.
Rental rates are impacted by factors such as age, wear and tear, and overall condition. To gain the clearest image of the local rental market, it is essential to choose houses that are as comparable to yours as possible. Get a current rental rate for each property by doing some research and asking around. Look online, speak with the tenant, or give the existing property manager or owner a call to get this information.
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 greater amount of research is needed to determine the average rent per square foot, although doing so is essential.
The total square footage of all comparable properties must be added up and divided by the total number of units to get the most accurate results. An area’s average price per square foot can be determined with this method. In terms of location, age, square footage, and amenities, it’s crucial that comparable properties match yours.
You can roughly estimate the rent you can charge per month by multiplying the average rent per square foot by the total square footage of your property. Keep in mind that the final sum may change depending on the unique characteristics and location of your property.
Adjust Your Rate as Needed
Still, there are a few other things to think about that might mean your rental rate needs to change. For instance, you might be able to get a higher rate if your property is in better condition than the competition. If it’s in a more desirable location or has special features or services, you might be able to get a higher rent.
Look at the current state of the economy and decide if the rental rate you can offer now will still be competitive with the market in the near future. Use the information you’ve gathered and your own opinion to set your rental rate.
Because the rental market is constantly changing, it’s crucial to conduct a market analysis on a regular basis, at least once a year. This could help you stay ahead of the competition and keep your property rented out.
Real Property Management Verita is a company you can trust. We can give you the most accurate rental market assessments in Winter Garden and the nearby places because we have access to unique industry data and know how to use it. You can contact us online or by calling 321-972-6823 to get more information or to have us do a market analysis on your property.
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