Managing a property requires a lot of time and effort. Not only do you need to promote and stage your location to entice prospective tenants, but you also have to charge an appropriate rent. How do you know how to determine an accurate price? Run a comparative market analysis. Not sure what that is, or how to go about running one? Here’s a look at just how to do both:
What is a comparative market analysis?
A comparative market analysis (CMA) reports the prices at which similar homes around the property recently sold. The more similar the properties are – in square footage and layout – the easier it is to determine your average rental rate. Keep the data as recent as possible as this is the ideal way to decide what you should charge in the current market.
How do you run a CMA?
Once you have the data of similar properties sold or rented near you, you need to make the appropriate adjustments. Take a look at the square footage and the room arrangement of the comparable properties. Keep in mind; most properties do differ in some way and, as such, you may need to make accounting adjustments according to differences in acreage, square footage, room layouts and more. The process from there is adding and subtracting these differences to find your property’s comparative value. With that value, you can set rent accordingly and charge what someone is willing to pay, rather than a random speculative rent amount.
Comparative market analysis reports require time and experience to understand. If this sounds like a task you would rather not do yourself, consider us your go-to property management team in the Austin area. We complete the comparative market analysis free of charge and help you determine the ideal rental price to keep your vacancy rates low! Sound interesting? Contact us today to schedule a meeting!