As any owner of a single-family rental property knows, staying ahead of the curve in today’s market is essential. One of the best ways to achieve it is to regularly conduct a rental market analysis. A rental market analysis is crucial, regardless of whether you are planning to buy or manage a property that you already own.
A competitive market analysis will provide you with information about what your competitors are up to in addition to assisting you in determining an accurate rental rate for each property. You can make a detailed rental market analysis 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 neighborhood. You can acquire this information by calling a local real estate agent or by conducting an online search. With this knowledge, you can understand what your competitors are doing.
It is imperative that you conduct a thorough evaluation of the neighborhood in which your property is situated, taking into account factors such as the ease of access to stores, the proximity to other points of interest, and the overall walkability of the area. Take note of how many homes appear run down or vacant, as well as how clean the streets are. All of this information, along 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. It is important to take into account many aspects of each property, including its square footage, number of bedrooms, and special amenities or services. Furthermore, give close attention to the condition of the property because well-kept homes typically rent for more than dilapidated ones. To find out this information, if available, you can walk through each property or look at pictures.
Age, wear and tear, and overall condition are factors that affect rental rates. Selecting properties closest to your own is essential for gaining the most accurate understanding of the local rental market. Investigate each property to find the current rental rate. You can look it up online, ask the tenant, or get in touch with the owner or property manager at the moment to find out this information.
Calculate the Average Rent per Square Foot
To determine the value of your property in the current market, obtaining the necessary information is critical. Obtaining the necessary information is essential for determining the worth of your property in the current market. An essential step in this procedure that necessitates more thorough investigation is figuring out the average rent per square foot.
The best results are obtained by multiplying the total square footage of all comparable properties by the total number of units. With this method, you can find the average price per square foot in the area. Verify if the age, location, size, and amenities of your property are shared by comparable properties.
Once you are aware of the average rent per square foot, you can multiply this figure by the total square footage of your property to get the fair rent you can charge. Remember that the exact cost may vary depending on your property’s location and specific features.
Adjust Your Rate as Needed
However, there are a few other factors that can also force you to adjust your rental rate. In case your property is in better condition than others, you might charge extra for it. If it’s in a more desirable location or has special features or amenities, you could even be able to negotiate a higher rent.
It is also necessary to consider the current state of the economy. Will you be able to charge a rental rate that is competitive with the market in the foreseeable future? Utilizing your best judgment and the knowledge you’ve gained, determine your rental rate.
Remember that because the rental market is ever-changing, you should do a market analysis frequently—ideally once a year. By doing this, you might be able to keep your property occupied and preserve your competitive advantage.
The professionals at Real Property Management Excelled are behind you. We are able to offer the most accurate rental market assessments in Puyallup and its neighboring areas thanks to our industry-exclusive data and necessary knowledge. Contact us online or give us a call at 253-275-5999 to learn more or to receive a market analysis for your property!
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