The United States is short of nearly 7 million rental homes according to a recent study by the National Low Income Housing Coalition. With no end in sight to the current housing crisis, being a landlord is a golden opportunity.
To reap the maximum amount of benefits, you need to conduct some rental analysis on your property to find out how much you should charge.
Rental property analysis is a crucial skill that will help you rent your home for the best possible price. This guide will help you find out what it takes to conduct some proper rental market analysis in your area.
Rental Analysis by Location
Some locations will be much more desirable than others. If you are fortunate enough to own a rental in these sought-after locations, you can charge a premium for your rent.
For instance, the median home price in Folsom California is $524,000. This is right around California's state median of $505,000.
That said, it is more than twice that of the U.S. national median. Keep your area's median home prices in mind when renting. The higher the value of your property, the higher your monthly rental rate can be.
Condition of Your Rental
"Maybe I should rent my home." is an easy thing to think, but it may not be easy to put into practice. When deciding how much you want to charge for rent make sure to assess your rental's condition.
Tenants won't want a place in disrepair. Nor will they want a home full of pests or mold. Make sure to spruce up your place if you rent it. The more you invest in improvements, the higher you can charge for rent.
The Housing Market
If you rent homes, you should be aware of the present housing market conditions. If there is a housing shortage, or the real estate market is high, people will pay more for rent. If not, you may have to lower it.
If you have a ton of expenses or own multiple different properties as a business, you may need to charge high rent to pay for your operation. If you don't have much overhead, you can afford to charge less for rent.
Quality of Tenants
Quality tenants can be hard to find and nightmarish ones seem to be a dime a dozen nowadays. If you find some quality tenants, keep their rent cheap to dissuade them from moving out.
It can be far more expensive to deal with tenant turnover than to keep your rental rates low and your current tenants satisfied. Also, be aware of what your tenants can and will pay.
If they are rich, it is fine to raise the rent. If they are struggling to make ends meet, however, this can be a moral dilemma for you.
Rent Long and Prosper
The longer you can rent your property out, the more money you stand to make. Finding and keeping quality tenants should be a major priority of yours as a landlord. So should charging the appropriate rate of rent.
Use the tips in this guide to conduct a proper rental analysis. If you need a rent analytics specialist, as well as a solid property manager, contact us today. We can handle all aspects of your rental so you don't have to.