How to Conduct a Rental Market Analysis
Did you recently purchase rental property in Maryland? You’re an up-and-coming real estate investor with high hopes and ambitions. To ensure your investment meets your expectations, it’s essential to fully understand the rental market situation in Maryland. This requires you to conduct a rental market analysis every six to 12 months. If you’re unsure why market analyses are necessary, or you want to know how to conduct one yourself, follow these tips to get you started.
Why Is a Rental Market Analysis So Important?
The goal of conducting a market analysis is to gain insights about the rental industry in your area. This knowledge keeps you on top of your game to ensure your strategy for growing a successful rental business is second to none.
With a rental market analysis complete, you will:
- Feel confident about the rate you set for your property.
- Understand what you must do to maximize your profits.
- Appreciate how residential construction in the area may affect the amount you charge for rent.
- Recognize that commercial construction may affect the value of your rental properties.
Conducting a Rental Market Analysis
With so much valuable information awaiting you, it’s difficult to know where to start. Here are the areas you must research to garner the information you need from a rental market analysis:
- Recent and future residential developments: What types of residential properties (single-family homes, duplexes, apartments, etc.) are available near your rental unit?
- Recent and future commercial developments: What in-demand developments (public transportation, schools, shopping centers, etc.) are popping up in your community?
- Rent averages: What is the average rent for various types of homes in your area?
- Improvements and rental rates: What minor improvements could you make (paint the walls, update the appliances, etc.) to attract more renters? How might these upgrades affect the rate you charge?
- Demands for certain features: What features do your competitors offer (proximity to schools, central air conditioning, washer and dryer hookups, etc.) that are similar to what you offer?
- Minimums vs. extras: What features are present in all rentals, and what are tenants willing to pay a premium for?
- Renter profiles: What are the ages, occupations, education level, income, family status, etc. of renters in your area?
- Vacancy rates: What is the vacancy rate in your area? How might this push your rental price up or down?
- Days on the market: How do the features and pricing of a rental unit affect how long it remains on the market?
- New vs. established: What is the ratio of new construction to established properties in your area?
- Marketing: How are your competitors marketing their properties? Do they use online portals, direct mail, or newspaper ads? How do they word their advertisements? Do they point out features and benefits that your property also offers? Are professional photos featured with the ad? If so, how many?
Request a Rental Market Analysis in Maryland
If you feel overwhelmed at the prospect of conducting a pertinent rental market analysis, let Tidewater Realty Group handle the task for you. We remove the guesswork, relying on our research, statistics, and intimate knowledge of rental rates in Maryland to conduct a formal rental market analysis. Our experience, resources, and critical thinking skills ensure you end up with an accurate analysis you can use to set the perfect rental rate.
To find out what your Maryland property’s rental rate should be, please request a market analysis from Tidewater Property Management today!