Being a single-family rental property owner, you understand how crucial it is to keep one step ahead of the competition given the state of the economy. Regularly conducting a rental market analysis is one effective way to achieve this. A rental market analysis might be beneficial if you are intending to purchase rental property or already own rental property and manage it.
A thorough market analysis may help you set an accurate rental rate for each property and will also provide you with information about what your competitors are doing. A thorough explanation of how to carry out a trustworthy rental market analysis will be given in the following piece.
Research the Neighborhood
The first step is to gather data. It’s significant to consider factors like the neighborhood’s vacancy rates and average rental prices. To do this, look for a local real estate agent or use the internet. Knowing this will help you understand your competitors more clearly.
In addition, it’s crucial to thoroughly evaluate the neighborhood where your property is located, including factors like the area’s general walkability, the quality of the schools nearby, and the ease of access to retailers. Take note of how well-kept the streets are and how many of the homes appear run down or vacant. This information, together with how desirable an area is, affects your rental rate.
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 whether or not there are any extra amenities. A well-kept property will command a higher rent than one in the same area and size that has been neglected. Visit each property in person or look through the available photos to learn more.
Age, general condition, and wear and tear are other factors that affect rental rates. Comparing the listings of properties that are close to your own location will provide you the most insight into the state of the local rental market. Lastly, find out what the current rental prices are for each property. You can find this information by doing an online search, talking to the tenant, or contacting 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. Determining the average rent per square foot is a critical stage in the process that requires extensive study.
For the most accurate results, total square footage of all comparable properties should be added and divided by the total number of units. This technique can be used to find the average price per square foot in the area. It is imperative to ensure that comparable properties have attributes such as age, size, location, and amenities with your own property.
By multiplying the average rent per square foot by the total square footage of your property, you can get an idea of how much rent you can charge each month. Keep in mind that the ultimate cost will depend on the special features and location of your property.
Adjust Your Rate as Needed
That said, based on a variety of other factors, you could adjust your rental rate. If your property is in better condition than the others in this scenario, you may be able to charge more. You might be able to bargain for a higher rent if the property offers special features or amenities, or if it’s in a more desirable location.
Consider whether the rental rate you are considering charging now will remain competitive in the near future, taking into account the current state of the economy. Establish the rental rate based on your best estimate and the information you have gathered.
Since the rental market is constantly changing, you should conduct a market analysis at least once a year. You’ll remain ahead of the game and be able to keep your property fully occupied by doing this.
You may rely on Real Property Management MidTown‘s experience. Because we have access to private industry data and have years of experience in the field, we are able to deliver the most accurate rental market analysis in Mansfield and beyond. Please call us at 817-583-6121 or contact us online if you have any questions or would like a free market analysis of your property.
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