If you are the owner of a single-family rental property, you already know how important it is to keep up with the market. Conducting a rental market analysis on a regular basis is one of the best ways to do that. While looking into a property you want to buy or while managing one you already own, a rental market analysis is very helpful.
In addition to helping you set an accurate rental rate for each property, a good market analysis will show you what your competition is doing. This article will show you how to do a correct rental market analysis.
Research the Neighborhood
The first step is to gather data. Check out the average rental prices and vacancy rates in the area. Searching online or getting in touch with a local real estate agent are two ways to go about doing this. Knowing this will help you figure out what your competitors are doing.
In addition, you should carefully evaluate the neighborhood where your property is located, considering things like nearby attractions, the area’s general walkability, the quality of the schools, the convenience of nearby stores, and so on. Keep track of how clean the streets are and how many homes appear run down or vacant. All of this information will change how desirable an area is, which will result in a change in your rental rate.
Identify Comparable Properties
Next, you will want to find several comparable properties close to your own. You should look at the property’s square footage, number of bedrooms and bathrooms, and any unique features or services it has. Carefully look at the property’s state as well; one that is well taken care of will rent for more than one that is falling apart. Walking through each property or, if possible, looking at pictures can help you figure this out.
Different factors like age, wear and tear, and general state affect rental rates. Find properties 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 by searching online, speaking with the renter, or contacting 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. More research is needed to figure out the average rent per square foot, which is an important part of the process.
Most exact results come from adding up the square footage of all similar properties and dividing that number by the number of units. Averaging the numbers will give you a price per square foot for 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 features as your residential property.
Find out how much the average rent is per square foot. Then, 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 number may be different based on the features and location of your property.
Adjust Your Rate as Needed
Your rental rate may need to be changed, though, depending on a number of other factors. You could, for instance, charge more if your property is in better shape than the others. Alternatively, you might be able to get a higher rent if it’s in a better area or has special features or facilities.
Additionally, you should think about the economy and whether the rental rate you can offer now will still be reasonable in the near future. Your best opinion and the information you’ve gathered should help you decide how much to charge for rent.
Not forgetting that the rental market is always shifting, so you need to do a market analysis often, preferably once a year. Staying ahead of the competition and keeping your property rented will help you do this.
Real Property Management of Soflo has experts on your side. With our insider knowledge and access to exclusive industry data, we can give you the most accurate rental market analyses in Miramar and the nearby areas. You can contact us online or call 786-527-1686 to find out more or ask for a market analysis regarding your property!
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