Did you recently purchase one of the 20 million rental properties across the US? Congratulations! Before you look for tenants and start generating rental income, you need a plan.
Conducting a rental analysis will ensure you make informed decisions moving forward. What is an investment property analysis, exactly? Read on to find out!
What Is a Rental Analysis?
A rental analysis can help owners determine how much to pay when purchasing property. The process involves analyzing local property values and rental market trends.
An investment property analysis can help you select profitable, desirable properties. This financial forecasting will ensure you make an informed decision.
Explore Rental Market Trends
Learn as much as you can about the Fayetteville, NC rental market. For example, local Realtors revealed a 3% year-over-year increase in median sales prices for all properties. The area's local housing market has experienced steady growth.
Researching rental market trends can help you:
- Make informed property upgrades
- Remain compliant with local laws
- Set rental rates
- Market vacant properties effectively
- Attract local renters
Compare your new rental property to similar homes in the area. What helps set your property apart? Consider the upgrades you can make to gain a competitive advantage.
Upgrading the property will make your home more attractive to local renters. You can also increase the rental rate.
Consider how much local landlords are charging monthly. Comparing prices will ensure you don't set your rate too high or low.
Setting above-average rates will scare away interest renters searching for properties within their budget. If your rate is too low, however, you won't reach your full earning potential.
Complete your investment property analysis using online tools. These include Zillow's Rent Zestimate and Rentometer.
How to Conduct a Rental Analysis
To complete a property valuation, research the area. Consider the:
- Job market
- Neighborhood
- Quality of life
- Safety
- Attractions
- Rental property prices
- Rental market trends
Look for trends between prices to ensure you don't overpay. Compare this price to local rental amounts and potential expenses.
For example, you may need to upgrade the rental property before putting it on the market. Consider how much you'll need to invest in the next 10 years. Determine the cost of routine inspections and maintenance to keep the property in good shape.
Weigh the pros and cons of investing in this property. If property management seems daunting, consider outsourcing. Partner with a full-service property management company to ensure you maximize your earning potential.
Request a Free Rental Analysis Today
Completing a rental analysis can help you make an informed decision before you buy a rental property. Use these effective tips to recognize rental market trends. Once you complete your property valuation, you can make a decision with your financial future in mind!
Remember, you don't have to complete your analysis alone. Instead, consider partnering with PMI All American. We have 20 years of experience changing and perfecting the industry.
We utilize state-of-the-art technology and our award-winning strategies to maximize each owner's earning potential. Contact us today for your free rental analysis!
