You already know how important it is to stay ahead of the curve in today’s market if you are a single-family rental property owner. One of the most effective ways to accomplish this is to conduct a rental market analysis on a regular basis. A rental market analysis is useful whether you are looking to buy a property or managing one you already own.
A good market analysis will show you what your competitors are doing and will assist you in determining an accurate rental rate for each property. We will lead you through the stages of conducting an accurate rental market analysis in this article.
Research the Neighborhood
The first step is to gather data. You should look at things like average rental prices in the region and vacancy rates. This can be accomplished by conducting an online search or contacting a local real estate agent. You can grasp what your competitors are doing once you have this knowledge.
It’s also critical to thoroughly evaluate the neighborhood in which your property is located, considering surrounding attractions, the overall walkability of the region, the quality of schools, availability to shops, and so on. Take note of how clean the streets are and how many homes appear run down or vacant. All of this information influences how desirable an area is, and thus your rental rate.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Assess the square footage, number of bedrooms and bathrooms, and any particular features or amenities that each property provides. Also, pay particular attention to the property’s condition, since one that is well-kept will rent for more than one that is in disrepair. This can be determined by walking through each property or looking at images, if they are accessible.
Rental rate factors include age, wear and tear, and overall condition. To receive the most realistic picture of the rental market in the area, look for properties that are as close to yours as possible. Finally, look into current rental rates for each property. You can find this information by searching online, speaking with the tenant, or contacting the existing 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. Calculating the average rent per square foot, which involves a more extensive analysis, is a critical step in this process.
To get the most accurate results, add together all comparable properties’ total square footage and divide it by the total number of units. This computation will provide you with the area’s average price per square foot. It is critical to ensure that comparable properties have qualities that are similar to your property in terms of location, age, size, and amenities.
You can estimate the reasonable rent you can charge by multiplying the average rent per square foot by the total square footage of your property. Remember that the final cost may vary based on the exact features and location of your property.
Adjust Your Rate as Needed
However, depending on a number of other conditions, you may need to change your rental rate. You can, for example, charge a premium if your property is in better condition than the others. Alternatively, if it is in a more desirable location or has unique features or facilities, you may be able to negotiate a higher rent.
You should also analyze the present state of the economy and if the rental rate you can currently charge will still be competitive in the market in the near future. Set your rental rate based on the data you’ve acquired and your best judgment.
Remember that the rental market is always changing, therefore you should conduct a market analysis at least once a year. This will help you maintain your property occupied and ahead of the competition.
The experts at Real Property Management Piedmont are on your side. We have exclusive industry data and the experience required to provide the most accurate rental market analysis in Atlanta and the surrounding areas. To learn more or to receive a market analysis for your property, please contact us online or by phone at 404-480-4820.
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