From 2020 to 2021, median rent rose by 19% across the US, signaling to investors that now is the time to buy property to rent. When you buy your property, it can be tempting to buy the first piece of real estate that comes within your budget, but this could cost you in the long run.
After all, many properties look great on paper but hide devastating secrets like low rental interest or invisible damage! Avoid these situations with an in-depth rental analysis before purchasing so you know if the investment will work before making a downpayment.
Conducting a Rental Analysis for Your Property
The main goal of a rental analysis is to ensure maximum property profitability. By collecting and analyzing the following data on your investment property, you set yourself up for success and consistent income!
1. Assess the Neighborhood
Location is a major factor when investing in rental properties. The first step of your analysis should be researching the neighborhood of your potential property. As you do this research, answer some of these basic questions:
- How much are other properties in this neighborhood renting for?
- Is the neighborhood close to schools, grocery stores, and public transportation?
- Are potential tenants eager to rent in this neighborhood?
- Is the asking price of this property similar to comparable homes in this neighborhood?
These determinations can help you ensure you're getting a good price on your investment. They also ensure that you will fill your tenant vacancies with ease.
2. Assess Property Condition and Repairs Needed
When conducting a rental analysis, you should assess your property condition and repair costs. Start by hiring a high-quality property inspector before making an offer. Inspectors often find deficiencies that home sellers and realtors try to cover up.
The goal of this step isn't just to figure out your total investment. It also helps you find out if the property will withstand many tenants for a long time.
3. Estimate Total Rent and Lease-Up Rates
When you assessed the neighborhood, you get an idea of how much similar properties in the area rent for. But, when you determine your final renting price, there are a few other considerations you should account for.
First, you should consider the mortgage and interest rates for the property. Then, find out what the property taxes for your selected property are. Finally, estimate the annual cost of maintenance and incidentals for the property.
Find Property Management in Charlotte, North Carolina!
After conducting a rental analysis, you have all the information you need to buy and rent your new property. For those new to real estate investing, navigating tenants and maintaining properties can be difficult. You might need a property management company to help ensure your investment is profitable.
Carolina Property Management is the premier full-service property management provider in Charlotte, North Carolina. Our team dedicates itself to helping you maintain profitable investments for years to come.
To find out more about our services or to request a quote, contact us today!
Some landlords are scared of the idea of owning section 8 housing, but if you click here, you can learn about the many benefits of being a section 8 landlord.
Check out this link to learn the most important questions to ask property managers before hiring them. https://www.carolinaspropertymanagement.com/blog/top-questions-to-ask-before-hiring-property-managers
