Tag: comparative market analysis

Knowing Your Property’s Worth: The Importance of Running a Comparative Market Analysis

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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. 

 

Investment Property Pricing Strategies For Constant Income and High Occupancy Rates

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The ultimate goal for investment properties is to have a constant stream of income and high occupancy rates, and to do that, you need to make sure your property is priced right. If your property is priced too high, potential renters will skip past it when searching online before they even look into it. 

Here are a few pricing strategies to utilize when pricing your investment property.

Perform a Comparative Market Analysis

While the name might sound scary, a Comparative Market Analysis (CMA) is simply comparing your investment property to similar homes in the area. Find homes with the same number of bedrooms and bathrooms with similar square footage and see what they’re priced at to come up with a competitive price for your property. 

In addition to bedrooms and bathrooms, look at your property’s upgrades, amenities, and location. These are all factors that can be considered when pricing your property. If your home has more to offer or a better location than the other homes, you can price it higher than other properties. At TALK Property Management, we provide this as a FREE service for you. 

Consider the Market

The real estate market can largely affect pricing and what potential renters are willing to pay. If demand is high and supply is low, prices usually increase. If demand is low and supply is high, landlords are likely to lower rent prices. It’s also worth noting that potential renters could be more or less likely to purchase a home than rent based on what the market is doing. So, having a clear understanding of the market is huge when it comes to pricing.

Keep Seasonality In Mind

Typically, rental demands are higher in the summer and early fall as opposed to spring and winter, so you could price your property higher if it’s listed during a peak time of year. Keeping seasonal trends in mind when you price your property and market it online are huge to ensure you’re getting the most money.

Staying competitive with other investment properties is huge when it comes to the overall success of your property. If you have any questions about pricing your investment property or you would like TALK Property Management to do the heavy lifting for you, reach out to us! We want your real estate investment to be a success!

Benefits Of Using A Property Management Company

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While owning an investment property can be a great source of income, it can come with some stressors. If you decide to handle all of the landlord responsibilities on your own, that means dealing with tenant screening, rent collection, marketing, requests, and more, which takes away time from finding your next investment or working with other clients.

Property management companies provide many benefits that will help save you time and stress. Let’s dive into why hiring a property management company is the right thing to do.

Tenants

Tenant screening can be very time-consuming and complex, which is one of the biggest reasons investors hire property management companies. Property managers do screening all the time, so they know exactly what to look for when scoping out high-quality tenants. They look for long-term tenants who will pay their rent on time and cause limited issues. If any problems arise, property managers will be the point of contact for tenants and address issues accordingly. 

Rent Collection

One of the most uncomfortable landlord responsibilities is chasing after rent if it isn’t paid on time. Property managers handle that for you by collecting rent, enforcing lease policies, and handling evictions if necessary. If tenants are consistently not paying their rent promptly or are failing to pay it at all, property managers will know how to handle it appropriately. 

Marketing

Property management companies handle all the marketing to get your property in front of the most people. They will take high-quality photos of the property, write up rental ads, and list your property on the most prominent websites where tenants are looking. Some property management companies, including Talk Property Management, will run a comparative market analysis on the property and recommend a starting rent amount based on current market trends to make sure you’re in line with the competition.

Shorter Vacancy

Property managers know how to keep tenants happy, leading to more long-term tenants and shorter vacancy periods. If property managers take care of issues and repairs in a timely manner and are quick to respond, tenants are more willing to stay in their lease when reasonable rent increases arise. Ultimately, tenants don’t want to deal with the stress of moving, so if they are well taken care of, and their needs are met, they’re more than likely to stay.

Property management companies can be a big help if you’re starting out or handling multiple investment properties at once. If you have any questions or need recommendations, reach out to us or read more about our property management services! We are always here to help.