Rental Market Analysis
How to determine the rental amount for your investment property
OVERVIEW & PURPOSE
Determining appropriate monthly rental amounts to charge your tenants, ensures your unit will be filled in a timely manner while allowing you enough cashflow to cover your expenses.
Factors of Consideration
You have heard it before in regards to Real Estate, Location, Location, Location. It’s also true for your investment property. Picking the right city in the right neighbourhood all go into determining if the tenants in that area are willing and able to pay your price. Typically a cities population that earns a higher income can also afford higher rents. Unfortunately, buying in those cities will also come at a premium, keep a lookout for deals( a good Realtor can help with this).
How many bedrooms and bathrooms is a paramount component of the market analysis, as having a specific number of these in a unit will be in more demand than others. With some research you could find out what is in the largest demand in the city you wish to invest in. Having central air conditioning, a garage or large backyard are all motivating factors which can contribute to pricing the unit . Updating to current desirable trends in finishings will also add perceived value to the place increasing its potential for income such as;
An emotional reaction begins the moment a potential applicant arrives at the property. If the home or building has been well maintained and nicely landscaped a desirability factor will carry through the rest of the tour. A sloppy first impression will sour the applicant and you may not get them back no matter how fantastic the interior is. Once inside the home should appear fresh, clean, bright and spacious. A coat of paint is one of the best return on your investment of time and money you can make.
Comparing your unit against others in the same area will give you valuable insight on the pricing of the property and I have attempted to give you the criteria of that comparison. If you have done your job right and advertised in print and online you will be pleased with your results.
Glenn Brown is owner of My Rental Unit property management and has enjoyed success with multiple unit investing.