Single-family rental property owners understand how important it is to stay current with the market. One of the most effective ways to achieve this is to conduct a rental market analysis on a regular basis. If you own rental property or are considering purchasing one, a rental market analysis would be incredibly beneficial.
A thorough market analysis will assist you in learning more about the competition and determining an accurate rental rate for each property. This article explains in full how to conduct a reliable rental market analysis.
Research the Neighborhood
The first step is to gather data. Consider the property’s square footage as well as any other features or facilities, in addition to the number of bedrooms and bathrooms. Pay particular attention to the property’s condition as well, because well-kept residences tend to rent for more than decaying ones. This evaluation can be enhanced by strolling into each property and, if accessible, looking at any images.
Age, general condition, and wear and tear are just a few of the factors that determine rental rate. To obtain a sense of the local rental market, look at houses that are as close to yours as feasible. Conduct some research to determine the current rental rate for each property. You can find this information by searching online, speaking with the tenant, or contacting the owner or existing property manager.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Look at things like square footage, number of bedrooms and bathrooms, and any special features or amenities each property offers. Also, pay close attention to the property’s condition since one that is kept up nicely will rent for more than one that is run down. This can be determined by doing a walk-through of each property or looking at pictures, if available.
Age, wear and tear, and overall condition affect rental rates. It’s important to find properties that are as similar to yours as you can to get the most accurate picture of the rental market in the area. Finally, research and get a current rental rate for each property. You can find this information by looking online, talking to the tenant, or calling the existing property manager or owner.
Calculate the Average Rent per Square Foot
To determine the value of your property in the current market, you must first acquire the relevant information. Finding the average rent per square foot takes more investigation, but it is still important.
To get the most accurate results, add together the total square footage of all comparable properties and divide it by the total number of units. This method can be used to get the average price per square foot in a specific location. In terms of location, age, square footage, and amenities, comparable properties must match yours.
You can obtain an idea of the monthly rent you can charge by calculating the average rent per square foot by the total square footage of your property. Remember that the total fee may vary depending on the specific characteristics and location of your property.
Adjust Your Rate as Needed
That said, your rental rate may need to change depending on a number of other factors. If, for example, their property is in better condition than theirs, they may be able to request a higher price. However, if it is in a more desirable location or offers unique features or services, you may be able to negotiate a higher rent.
Consider the current state of the economy and whether the rental rate you may provide will stay competitive in the near future. Determine your rental rate based on the information you’ve acquired and your best judgment.
Keep in mind that the rental market is continuously changing, therefore it’s necessary to conduct a market analysis on a regular basis, ideally once a year. This could help you keep your property occupied and outperform the competition.
Real Property Management Enterprises‘ experience may be relied on. Our rental market assessments in Edmond and the neighboring areas are the most accurate since we have access to unique industry data and the knowledge to understand it. If you would like additional information or would like us to conduct a market analysis on your property, please email us at contact us or call us at 405-463-0040.
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