You already know how important it is to stay ahead of the curve if you are a single-family rental property owner. Doing a rental market analysis on a daily basis is one of the best ways to do that. When looking into a property you want to buy or when managing a property you already own, a rental market analysis is very helpful.
In addition to helping you determine an accurate rental rate for each property, a good market analysis will show you what your competitors are doing. Learn how to do a correct rental market analysis in this piece.
Research the Neighborhood
The first step is to gather data. A good place to start is by looking at the average rental prices and vacancy rates in the area. A local real estate agent or a search engine can be used to find this. This knowledge will help you figure out what your competitors are doing.
Also, you should carefully evaluate the neighborhood where your property is located, taking into account things like nearby attractions, the area’s general walkability, the quality of the schools, the convenience of nearby stores, and so on. Take note of the cleanliness of the streets and how many homes appear run down or vacant. Everything you’ve learned 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. Check out each property’s square footage, number of bedrooms and bathrooms, and any unique features or services it has to offer. You should also pay close attention to how well the property is kept up, as one that is will rent for more than one that is falling apart. You can find this out 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. Find homes that are as much like yours as possible to get the most exact picture of the area’s rental market. Get a current rental rate for each property by conducting some study. You can find this information online, by talking to the renter, or by calling 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. Figuring out the average rent per square foot is an important part of this process that needs a more in-depth look.
For the most exact results, add up all the square footage of similar properties and divide that number by the number of units. This will give you an idea of the typical price per square foot in the area. It is 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 property.
Once you know how much the average rent is per square foot, you can multiply that number by the total square footage of your property to get an idea of how much rent you should charge. Remember that the final amount may be different based on the features and location of your property.
Adjust Your Rate as Needed
There are, however, a number of other reasons why you might need to change your rental rate. You can charge more if, say, your property is in better shape than the others. Or, you might be able to get a higher rent if it’s in a better area or has special features or facilities.
The economy should also be taken into account, and you should think about whether the rent rate you can charge now will still be fair in the near future. Setting your rental rate should be based on the information you’ve gathered and your own good sense.
Don’t forget that the rental market is always changing, so you need to do a market analysis often, like once a year. That way, you’ll stay ahead of the competition and have people living in your property.
People who work at Real Property Management Keystone are on your side. We can give you the most accurate rental market studies in Upper St Clair and the nearby areas because we have access to unique industry data and the knowledge to use it. Online Contact us or by phone at 412-385-2300 to find out more or ask for a property market analysis!
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