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Being successful in the real estate game means understanding it. Market analysis will help you oversee the industry, leading to informed decisions about where to invest and how to maximize your returns.
In today’s article provided by HomeRiver Group, we will go over three easy steps to create this analysis.
Why do this
First, let’s go over some of the benefits you would get from doing this.
Identify the best rental price: It will help you determine the best rental price for their properties. They can set a competitive and profitable rate by researching current market trends and rental prices in the area.
Understand the rental market: Provides an in-depth understanding of the rental market in the area, educating them on the type of property to invest in, the features and amenities to include, and the best strategies for marketing and advertising.
Attract the right tenants: With the right rental price and an understanding of the rental market, landlords and investors will be better able to attract the right tenants for their properties. It will lead to a strong tenant base and an increased occupancy rate.
Maximize profits: The main result will be maximizing profits. We often find out that if landlords would research more, they would set better prices, attract more tenants, and their property would perform better financially.
Step 1: Familiarize Yourself With the Market
The first step in conducting a market analysis is to familiarize yourself with the market. Research the area you are looking to invest in, the types of properties available, and the local economy. This will give you a good overview of the trends that drive the market and what types of properties are in demand.
You should take the time to read up on the local economy, population growth, and other factors that could affect the market. You can take this information from online forums and communities, local newspapers and magazines, local real estate clubs, investment portals, social media, etc. This extra step will help you understand whether the market will likely grow or decline soon.
Step 2: Analyze the Competition
A must is to research the rental properties in the area. This will give you an idea of what rentals are popular there and what they offer regarding rental prices, amenities, and services. If you can, take some time to talk with the locals and ask about occupancy rates and if there are general complaints or amenities they might want. According to these Tampa property management companies, doing this will help you identify opportunities to differentiate your rental in that market and offer a better deal.
Observe if there are more young or older people if they are renting for long-term or short-term, what amenities they want, if they want to be close to a certain supermarket, etc. Understanding the tenants in your market can help you determine the best types of properties to invest in and how to best serve your future tenants.
Step 3: Evaluate Rental Prices
The next step in conducting a market analysis is to evaluate the rental prices in the area. To have an accurate price average, compare the properties most similar to yours (this means the same number of rooms, as close in size as possible, similar features and amenities, etc.). Make sure you’re comparing apples to apples to have an adequate idea of the rental price you need to charge.
After you do the math, compare the general market supply to what you can offer. Do you have any extra features or amenities that may attract more potential tenants? Such features can be a heated hot tub, a pool, a small gym, an oversized garage, and anything that may bring more comfort to them. Amenities such as the ones listed here are huge advantages that can help you increase your price without being afraid it will scare people off.
Conclusion
This analysis will put you one step ahead in your plans and enable you to start on the right foot. Familiarize yourself with the market and see what is expected. By conducting a comprehensive market analysis, you will secure the right investment property to maximize your returns.
How a property manager can help
Here, a property manager is your best friend. No one knows the market better than the local managers that take care of the properties there. They know it inside and out, and it’s best to consult with them before any major decision.
Get in touch with us today and learn more about our services.