Inflation impacts everyone, but rent increases are the biggest issue for those who don't own their own homes.
As a landlord or prospective landlord in Teaneck, NJ, you must charge fair rent prices for your properties if you want to attract tenants and cover your costs. If you don't, you run the risk of ongoing vacancies and limited rental income from your investment properties.
A rental analysis is the best way to calculate a fair price for your rental property. Read on to find out more about this process.
The Role of a Rental Analysis
It only makes sense to calculate your potential earnings before investing in real estate or renting out your investment home. The insights you gain from these calculations will help you discover optimal rental prices and attract good tenants.
There are five major steps involved in a rental analysis:
1. Discover Local Rental Rates
Look at similar properties in the area to see what they cost per month to rent. Be sure to compare properties with many similarities to your own, such as amenities, size, and condition.
This is the best way to determine what people are prepared to pay to rent your home. It will help you avoid overcharging and driving away tenants, as well as undercharging and losing money.
2. Look into Vacancy Rates
Vacancy rates are essential for assessing demand and competition. High vacancy rates indicate an oversupply of rentals and make it challenging to find tenants.
Low vacancy rates suggest high demand and a competitive market. You can get this information from local realtors or housing authorities. A good property manager can also help you gauge potential demand for a rental property.
3. Consider Local Economic Factors
Several economic factors can impact the rental market in an area. The main ones are:
- Industry developments
- Job growth
- Population trends
New businesses, low unemployment, and an increasing population all boost demand for rental accommodation. As a bedroom suburb for the NYC metropolitan area, Teaneck is heavily impacted by the city's economic indicators.
4. Study Tenant Demographics
Analyzing the population near the property's location will help you determine your target market, e.g., retirees, students, families, or young professionals.
Each demographic has different preferences and needs. Knowing what your target demographic wants will help you price and market your rental property effectively.
5. Research Market Trends
Look at similar properties in the area to see what they cost per month to rent. Be sure to compare properties with many similarities to your own, such as amenities, size, and condition.
This is the best way to determine what people are prepared to pay to rent your home. It will help you avoid overcharging and driving away tenants, as well as undercharging and losing money.
Get Help With Your Rental Properties
If you're new to property investment or starting your journey as a landlord, it's best to have professional help with all your property management needs.
PMI North Jersey is backed by over 20 years of experience in real estate and offers a full range of property management services for landlords, tenants, and investors.
We can help you with a free rental analysis to help you choose the perfect investment property or price your existing rental correctly. Browse our blog for more landlord advice, reach out, or enter your property address to get started.
