Single-family rental property owners, you know how important it is to stay current with the market. One of the greatest ways to achieve that is by completing a rental market analysis regularly. If you own rental property or are thinking about purchasing one, a rental market analysis will prove invaluable.
You may learn more about the competition and determine an accurate rental rate for each property with the help of a thorough market analysis. The process of doing a reliable rental market analysis is laid out in detail here.
Research the Neighborhood
The first step is to gather data. Average rental prices and vacancy rates in the neighborhood are two indicators to consider. Find a local real estate agent or conduct an internet search to accomplish this. With this knowledge in hand, you’ll be able to stay one step ahead of the competition.
Additionally, it’s crucial to evaluate the neighborhood your property is located in, taking into account things like the proximity of local attractions, the area’s overall walkability, the caliber of the schools, the availability of shops, etc. Keep an eye out for how clean the streets are and how many homes appear run down or vacant. How desirable an area is, and hence your rental rate, will be affected by all of these information.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. Consider the property’s square footage, the number of bedrooms and bathrooms, and any additional features or facilities. Also, pay particular attention to the property’s condition since one that is kept up properly will rent for more than one that is run down. Doing a walk-through of each property or reviewing images, if any, will help with this determination.
Rental rates are influenced by factors such as age, wear and tear, and overall condition. To get a good feel for the local rental market, it’s best to look at properties that are as comparable to yours as possible. Get the current rental rates for each property by doing some research. Looking online, speaking with the tenant, or contacting the existing property manager or owner will all help you locate this information.
Calculate the Average Rent per Square Foot
To determine the value of your property in the current market, it is essential that you collect the appropriate data. A more in-depth investigation is needed to determine the average rent per square foot, although doing so is essential.
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. An area’s average price per square foot can be determined with this method. In terms of location, age, square footage, and amenities, it’s crucial that comparable properties match yours.
You can roughly estimate the rent you can charge per month by multiplying the average rent per square foot by the total square footage of your property. Keep in mind that the final sum may change depending on the unique characteristics and location of your property.
Adjust Your Rate as Needed
However, there are several other considerations that may need a change in your rental rate. If your property is in better condition than the competition, for instance, you may be able to demand a higher rate. Alternatively, you might be able to get a higher rent if it’s in a more desirable location or has unique features or services.
Think about whether or not the rental rate you could charge right now will still be competitive with the market in the near future, and factor in the state of the economy. Set your rental rate using the data you’ve collected and your best judgment.
Remember that the rental market is continuously changing, so it’s vital to conduct a market analysis often – at least once a year. You may use this to keep your property occupied and ahead of the competition.
You can trust in the expertise of Real Property Management Endeavor. Our rental market evaluations in Saint Louis and the surrounding areas are the most precise since we have access to exclusive industry data and the knowledge to interpret it. To get additional information or to have us perform a market analysis on your property, please contact us online or give us a call at 636-244-5959.
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