As an investor, when you purchase a property to be used as a rental, many factors go into deciding which property you choose. Not only do you want the property to be in a good location near amenities, but you also want the rent you charge to be affordable and attractive to potential tenants.
How do you decide what the appropriate amount of rent is? By running a comparative market analysis! Let’s explore what a comparative market analysis is and why it is important for your rental property.
What is a Comparative Market Analysis?
A comparative market analysis (CMA) is a report that compares the prices of similar homes sold in a specific area. While some adjustments will need to be made since not all homes are the same, the CMA gives you an idea of what homes have sold for, which can help you determine an appropriate rent amount for your property.
Many factors are taken into consideration, including:
- Location
- Number of bedrooms and bathrooms
- Square footage
- Amenities and upgrades
- Current market demand
Why Should You Run A CMA?
Establishing the appropriate rent for your rental property is important when you’re advertising it online. If your rent is too high, it can lead to longer days on the market and more money out of your pocket.
Here are a few other reasons why running a CMA on your rental property is important:
- Attracts high-quality tenants to your property
- Allows you to stay competitive with other available rental properties
- Maximizes income and potentially reduces vacancies
- Saves you marketing dollars
- Less stress for you and your business
Understanding the ins and outs of a comparative market analysis may require an experienced property manager. If this sounds like a task you would rather not do yourself, reach out to us! TALK Property Management would love to run a comparative market analysis free of charge and help you determine the ideal rental price for your property.
