If you’re a Nashville rental property manager, you may already know it’s crucial to stay ahead of the curve in today’s market. One of the best ways to do that is by conducting rental market analysis regularly.
A rental market analysis is very useful in researching a property you want to buy or managing that 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 collect the data. You will want to look at average rental prices and vacancy rates. This can be done by searching online or contacting a local real estate agent. With this information, you can understand what your competition is doing.
It is also essential to carefully evaluate your property’s neighborhood, 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 run down or vacant. All of this information will affect how desirable an area is and, by extension, your rental rate.
Identify Comparable Properties
After that, you will want 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 quickly bring in more rent than one in disrepair.
This can be determined 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 find this information online by talking to the tenant or calling the existing property manager or owner.
Calculate the Average Rent per Square Foot
Once you have this information, you can understand what your property is worth in today’s market. But you’ll need to calculate the average rent per square foot to get the most accurate analysis. 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 estimate what you could charge in rent.
Adjust Your Rate as Needed
However, 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 align with the market shortly. Use your gathered information and your best judgment to set your rental rate.
The rental market is constantly changing, so conducting a market analysis regularly is essential – at least once a year. This will help you stay ahead of the competition and occupy your property.
Of course, an accurate market analysis can take time, and it cannot be easy to locate all the information you need. Some data may not be available to you at all. In such cases, having the Real Property Management Key Response professionals on your side can be highly helpful. 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 request a property market analysis!
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