Given the state of the economy, as the owner of a single-family rental property, you know how important it is to stay ahead of the competition. One good way to do this is to do a rental market analysis on a regular basis. If you want to buy rental property or already own rental property and are managing it, a rental market analysis might be helpful.
In addition to giving you information about what your competitors are doing, a detailed market analysis may help you determine an accurate rental rate for each property. In what comes next, I’ll go into great detail about how to do a reliable rental market analysis.
Research the Neighborhood
The first step is to gather data. The average rental prices and vacancy rates of the area are important considerations. Find a local real estate agent or conduct your search online to accomplish this. This information will help you get a better sense of your rivals.
Additionally, it’s important to carefully evaluate the neighborhood where your property is located, taking into account things like the general walkability of the area, the caliber of the schools nearby, and the convenience of nearby stores. Observe how well the streets are kept and how many of the homes appear run down or vacant. With this knowledge and how desirable an area is, you can set a rental rate.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Find out the property’s square footage, how many bedrooms and bathrooms it has, and if there are any other features that make it stand out. A property that has been well taken care of will command a higher rent than one that has been neglected in the same area and size. You can see each property for yourself or look at the pictures to find out more.
Other factors that affect rental rate include age, general health, and wear and tear. You can get the best idea of how the local rental market is doing by comparing the lists of homes that are close to where you live. Lastly, find out how much each property rents for right now. You can talk to the tenant, conduct an online search, or get in touch with the owner or existing property manager to find 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. Finding the average rent per square foot is a very important step that needs a lot of research.
The total square footage of all comparable properties should be added up and divided by the total number of units to get the most accurate results. To find the average price per square foot in the area, this method can be used. It is crucial to make sure that comparable properties share characteristics with your own property, such as age, size, location, and amenities.
You can get an idea of how much rent you can charge each month by multiplying the average rent per square foot by the property’s total square footage. Remember that the exact cost will depend on your property’s unique traits and where it is located.
Adjust Your Rate as Needed
Still, you might need to change your rental rate because of a number of other things. In this situation, you might be able to charge more if your property is in better condition than the others. Some properties have better features or services, or they may be in a more desirable area, which could help you negotiate a higher rent.
Take a look at the current state of the economy and decide if the rental rate you want to charge now will still be competitive in a short time. Set the rental rate based on what you know and what you think is the best price.
You should do a market analysis at least once a year because the rental market is always changing. This will keep you ahead of the game and allow you to keep your property fully busy.
Real Property Management Bay State West has a lot of knowledge, which you can trust. We are able to give you the most accurate rental market analysis in Belchertown and beyond because we have access to private industry data and have worked in the field for years. We can be reached at 413-514-0050 or contact us online if you have any questions or would like a free market analysis of your home.
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