Did you know that there are over 20 million rental properties in the United States?
Those of you who are considering investing in your own rental property may like where the overall market is going. However, you may not have as much knowledge about the area that you want to invest in.
This is why you need to conduct a rental analysis. A rental property analysis will give you a good idea of if this is a good or bad investment.
What do you have to do to conduct this? Here are three things that you need to remember.
1. Know Your Rental Strategy
The first thing you have to do is you have to know your rental strategy. It will impact how you will look at research that is done in the steps below.
Depending on the market or the property that you are investing in, this strategy may change.
For example, let's say that you want to buy a condominium in Myrtle Beach. That is a tourist town, so you may be more in the short-term rental market there.
But how about if you are investing in an apartment complex in Atlanta? Since that is a bigger city with more people likely to want to move there, a long-term rental approach may be the way to go there.
2. Evaluate the Neighborhood
The next thing that you want to do is evaluate the neighborhood that you are considering buying a property in. You have to be aware of what people may consider when picking an apartment to rent.
Some things that may come up are how safe the neighborhood is, how walkable the neighborhood is, what bars and restaurants are nearby, what the school system looks like, and the main entertainment in the area.
Look at every one of these things and see if the neighborhood has enough to offer to potential tenants. If you think it does, then you can move forward.
3. Compare Nearby Rental Properties
Finally, to understand the local market, you need to evaluate the competition. That means analyzing other rental properties that are in your neighborhood. Here, you should specifically target ones that are of similar size as yours.
So, in this example, you can look at other two-bedroom apartments with about 1,000 square feet of space. Find out what similar properties are charging for rent and then you can get a good idea of what you can charge.
Have an idea of what the median rent is, too. In 2021, the median rent in Atlanta was $1,488 per month. That went up 17% compared to the year prior, so it is important to note these trends.
Conduct a Rental Analysis
These are three things that you need to know about conducting a rental analysis. You must compare local properties, know the neighborhood's worth, and have a rental strategy ready to go.
Do you need an Atlanta rental analysis? Message us and see how we can help you today.