As the owner of a single-family rental property, you already know how important it is to keep up with the market. Often doing a rental market analysis is one of the best ways to do that. Whether you are looking at a property you want to buy or taking care of one you already own, a rental market analysis is very helpful.
You can set an accurate rental rate for each property with the help of a good market analysis, which will also give you an idea of what your competition is doing. Following this piece, we will show you how to do a correct rental market analysis.
Research the Neighborhood
The first step is to gather data. You should check out things like the average rental prices and vacancy rates in the area. Searching online or calling a local real estate agent can help you with this. Now that you know these things, you can figure out what your competitors are doing.
It’s also important to carefully evaluate the neighborhood in which your property is located, taking into account things like nearby attractions, the area’s overall walkability, the quality of the schools, the convenience of nearby stores, and so on. Keep track of how clean the streets are and how many homes appear run down or vacant. This information will change how desirable an area is, which will then change your rental rate.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Take a look at the property’s square footage, number of bedrooms and bathrooms, and any unique features or services it has to offer. Also, pay close attention to how well the property is kept up. A well-kept property will sell for more than a run-down one. You can find out this by walking through each property or, if pictures are available, by looking at them.
Rental rate factors include age, wear and tear, and general state. To get the most true picture of the rental market in the area, you should look for homes that are as much like yours as possible. Get a current rental rate for each property by doing some research. You can look this up online, talk to the tenant, or call the current property manager or owner.
Calculate the Average Rent per Square Foot
To determine the value of your property in the current market, obtaining the necessary information is critical. Finding the average rent per square foot is an important part of this process that needs a more in-depth look.
To get the most exact results, you need to add up all the square footage of similar properties and then divide that number by the number of units. With this math, you can find the average price per square foot for the area. It’s important to make sure that comparable properties are located in the same area, are the same age, are the same size, and have the same amenities as your home.
You can figure out how much rent you can charge by multiplying the average rent per square foot by the total square footage of your property. Keep in mind that the final amount may be different based on the features and location of your property.
Adjust Your Rate as Needed
But there are a few other things that could mean you need to change your rental rate as well. For instance, you can charge more if your property is in better shape than the others. You might also be able to get a higher rent if it’s in a better area or has special features or perks.
Furthermore, you should think about the current state of the economy and ask yourself if the rental rate you can offer now will still be reasonable in the near future. Set your rental rate based on the information you’ve gathered and your own opinion.
Keep in mind that the rental market is always changing, so you need to do a market analysis often, like once a year. You will stay ahead of the competition and be able to rent out your property.
The people who work at Real Property Management Summit are on your side. We have access to unique industry data and the knowledge to give you the most accurate rental market studies in Staunton and the nearby areas. Contact us online or call 540-315-8090 to find out more or ask for a property market analysis!
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