If you are a Hermitage rental property manager, you may already know it’s essential to stay ahead of the curve in today’s market. One of the best ways to make that is by conducting rental market analysis consistently.
A rental market analysis is particularly helpful whether researching a property you want to buy or managing one you already have. A good market analysis will give you an idea of what your competition is doing and help you set an accurate rental rate for each property. This article will walk you through performing an accurate rental market analysis.
Research the Neighborhood
The first step is to bring together data. You’re going to want to look at average rental prices and vacancy rates. This can be done by searching online or contacting a local real estate agent. Once you have this information, you can start to get an idea of what your competition is doing.
It is also essential to meticulously evaluate the neighborhood your property is in, including nearby attractions, the overall walkability of the area, the quality of schools, access to shopping, and so on. Note whether the streets are clean and how many homes appear to be run down or vacant. All of these data will affect how desirable an area is and, by extension, your rental rate.
Identify Comparable Properties
Next, you would wish to find several comparable properties close to your own. Look at square footage, the number of bedrooms and bathrooms, and any special features or amenities each property offers. Pay attention to the property’s condition. A well-kept property can easily bring in more rent than one that has been in disrepair.
This information can be concluded by doing a walk-through of each property or looking at pictures, if available. Age, wear and tear, and overall condition can affect rental rates. It’s important to find properties that are as similar to yours as you can to get the most accurate picture of the rental market in the area.
Do your homework and determine the current rental rate for each property. You can get this information online by talking to the tenant or calling the existing property manager or owner.
Calculate Average Rent per Square Foot
Once you got this information, you can start to get an idea of what your property is worth in today’s market. But in order to get the most accurate analysis, you’ll need to calculate the average rent per square foot. Divide the total square footage of all the comparable properties by the total number of units. This will give you an average price per square foot for the area. You can then multiply this number by your property’s square footage to get a good estimate of what you could charge in rent.
Adjust Your Rate, as Needed
Nevertheless, you may also need to adjust your rental rate based on several other factors. For example, if your property is in better condition than the others, you may be able to charge a premium. Or, if it’s in a more desirable location or offers special features or amenities, you may also be able to get a higher rent.
You will also want to consider the current state of the economy and whether the rental rate you could charge right now will still be in line with the market in the near future. Use the information you’ve gathered and your best judgment to set your rental rate.
The rental market is always changing, so it’s important to conduct a market analysis regularly – at least once a year. This will help you stay ahead of the competition and keep your property occupied.
Not surprisingly, an accurate market analysis can take time, and it can be difficult to locate all the information you need. Some data may not be available to you at all. In such cases, it can be extremely helpful to have the professionals at Real Property Management Investor’s Choice on your side. We have exclusive industry data and the expertise necessary to offer the most accurate rental market analyses you will find. Contact us online today to learn more or to request a market analysis for your property!
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