Being an owner of a single-family rental property, you are well aware of how important it is to be on top of current trends in the industry. Regularly performing a rental market analysis is one of the finest strategies to achieve that. Whether you are managing a rental property that you already own or researching properties to acquire, a rental market analysis is essential.
In addition to helping you determine an accurate rental rate for each property, a thorough market analysis will provide you with insight into what your competitors are doing. We’ll guide you through the process of conducting a precise rental market analysis in the following paragraphs.
Research the Neighborhood
The first step is to gather data. It’s important to consider factors like vacancy rates and the area’s average rental prices. A local real estate agent or an internet search can be used for this. You can comprehend what your competition is doing after you have this information.
Additionally, it’s crucial to evaluate the neighborhood in which your property is located, taking into account things like the accessibility of shops, the proximity of neighboring attractions, and the area’s general walkability. Keep track of how clean the streets are and how many homes appear run down or vacant. Your rental rate will be influenced by all of this information, which will also determine how desirable an area is.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Take a look at the square footage, number of bedrooms and bathrooms, and any other features or facilities that each property has to offer. Additionally, pay special attention to the property’s condition because a well-maintained one will rent for more money than a dilapidated one. If images are available, they can be viewed or a walkthrough of each property can be conducted to ascertain this.
Rental rate factors include age, wear and tear, and general condition. In order to obtain the most realistic image of the local rental market, it is crucial to choose houses that are as comparable to your own as possible. Lastly, investigate each property and find out the current rental rate. You can look this information up online, speak with the renter, or give 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. The average rent per square foot calculation is a critical step in this process that calls for a more thorough investigation.
The total square footage of all comparable properties must be added up and divided by the total number of units to get the most accurate results. You will receive an average price per square foot for the area based on this calculation. It is imperative to ascertain that comparable properties have attributes such as location, age, size, and amenities with your own property.
To get an idea of the fair rent you can charge, multiply the average rent per square foot by the total square footage of your property. Keep in mind that the final amount could change based on the location and unique features of your property.
Adjust Your Rate as Needed
However, depending on a number of additional variables, you could also need to modify your rental rate. One could charge more if their property is in better condition than the others. You might also be able to negotiate a higher rent if the apartment is in a more sought-after location or has unique features or amenities.
The state of the economy at the moment should also be taken into account. You should also examine whether the rental rate you may charge now will remain competitive with the market in the near future. Set your rental rate using the knowledge you’ve obtained and your best judgment.
It is imperative to conduct a market analysis on a regular basis, preferably once a year, due to the ever-changing nature of the rental market. By doing this, you can keep your property occupied and stay one step ahead of the competition.
The experts at Real Property Management Main are supporting you. We can provide the most accurate rental market analysis in Detroit and the surrounding areas since we have access to proprietary industry data and the requisite experience. For additional information or to get a market analysis for your property, please Contact us online or give us a call at 248-852-6204.
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