Single-family rental property owners, you know how important it is to stay current with the market. Regularly completing a rental market analysis is one of the finest strategies to achieve this goal. If you own rental property or are thinking about purchasing one, a rental market analysis will prove invaluable.
You can learn more about your competitors and determine an accurate rental rate for each property with the help of a thorough market analysis. The process of doing a reliable rental market analysis is laid out in detail here.
Research the Neighborhood
The first step is to gather data. Average rental prices and vacancy rates in the neighborhood are two indicators to consider. The internet and local real estate agents are both good resources for this. Once you have this knowledge, you can comprehend what your opponent is doing.
You should also carefully evaluate the neighborhood your property is located in, taking into account things like the proximity of surrounding attractions, the area’s overall walkability, the standard of nearby schools, the convenience of adjacent stores, and so on. Keep an eye out for how clean the streets are and how many homes appear run down or vacant. Your rental rate will be impacted by all of this information, as well as how desirable an area is.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Take into account the property’s square footage, the number of bedrooms and bathrooms, and any additional features or facilities. In addition, the property’s condition should be carefully considered, as it has a direct impact on the asking rent. Doing a walk-through of each property or reviewing images, if any, will help with this determination.
Rental rates are influenced by factors such as age, wear and tear, and overall condition. To get a good feel for the local rental market, it’s best to look at properties that are as comparable to yours as possible. The last step is to check the market and determine the current rental rate for each property. You can learn this by asking the tenant, doing some research online, or giving the current property manager or owner a call.
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 more in-depth investigation is needed to determine the average rent per square foot, although doing so is essential.
You must add up the total square footage of all comparable properties and divide it 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, size, and amenities, it’s crucial to make sure that comparable properties share these features with your own property.
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
However, there are a number of other considerations that may need a change in your rental rate. You may be able to charge more if, for instance, your property is in better condition than the competition. You might also be able to get a higher rent if it’s in a more desirable location or has unique features or facilities.
Take into account the state of the economy and whether or not the rental rate you may charge now will still be competitive in the near future. Set your rental rate using the data you’ve collected and your best judgment.
It’s important to conduct a market analysis on a regular basis, at least once a year, because the rental market is continuously changing. You may use this to keep your property occupied and ahead of the competition.
You can rely on the experts at Real Property Management Faith. With our extensive knowledge of the local rental market and access to proprietary industry data, we can provide the most in-depth and reliable market analysis available in Fishers and the surrounding areas. To get additional information or to have us perform a market analysis on your property, please Contact us online or at 317-219-4363.
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