Every owner of a single-family rental property knows how important it is to stay ahead of the curve in today’s market. Doing a rental market analysis on a regular basis is one of the best ways to accomplish that. It is imperative to conduct a rental market analysis whether you are considering buying a property or managing one that you already own.
A competitive market analysis will not only assist you in figuring out an accurate rental rate for each property but will also reveal what your rivals are up to. Performing an accurate rental market analysis is made easier with the help of this article.
Research the Neighborhood
The first step is to gather data. A few things you should look at are the average rental prices and vacancy rates in the region. To find out this information, you can either phone a local real estate agent or conduct an online search. With this knowledge in hand, you can understand what your competitors are up to.
Additionally, it is essential to carefully evaluate the neighborhood in which your property is situated, taking into account the area’s overall walkability, the ease of access to stores, and their closeness to other points of interest. Keep an eye on how well-kept the streets are and how many homes appear run down or vacant. All of these factors, together with how desirable an area is, will affect your rental rate.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Examine the square footage, number of bedrooms, and any special features or amenities that each property provides, among other things. A well-maintained property will also typically rent for more than a run-down one, so pay close attention to its condition. In order to learn this information, if it is available, you can have a look at pictures or walk through each property.
Age, wear and tear, and general condition are included in the rental charge. Selected properties should be as close to your own as feasible to provide you with the most accurate picture of the local rental market. For each property, find out the current rental rate by doing some research. The tenant, the current property manager, or the owner can all provide you with this information. You can also look it out online.
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 crucial aspect of this process is calculating the average rent per square foot, which requires a more detailed analysis.
To obtain the most accurate results, you must sum up the total square footage of all comparable properties and divide it by the total number of units. This calculation will give you an average price per square foot for the area. It’s essential to ensure that comparable properties have similar characteristics to your property in terms of location, age, size, and amenities.
After obtaining the average rent per square foot, you can multiply this figure by your property’s total square footage to estimate the reasonable rent you can charge. Remember that the final figure may vary depending on your property’s specific features and location.
Adjust Your Rate as Needed
But, you might also need to adjust your rental rate due to a number of other factors. If your property has better condition than others, you can charge extra. If the property is in a more sought-after location or offers special amenities, you could even be able to bargain for a higher rent.
It’s important to consider the current state of the economy. Will the rental rate you may be able to charge right now remain competitive in the near future with the market? Applying your acquired knowledge and sound judgment, choose your rental rate.
Remember that you should conduct a market analysis on a frequent basis, ideally once a year, due to the dynamic nature of the rental market. Your property will remain occupied and you will be able to keep an advantage over the competition.
The professionals of Real Property Management Allegiance are on board with you. With the most accurate rental market assessments in Key Largo and the surrounding areas, thanks to our industry-only data and necessary expertise. Contact us online or phone 786-206-8611 to learn more or to receive a market analysis for your property!
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