How do you price your rental property as a first-time landlord in Orlando, Florida? You want to set a price that not only attracts potential tenants but also makes you profits. According to statista.com, renters in the United States occupied about 45 million units in 2023.
A rental analysis is a crucial tool for landlords and property managers. It makes it easier for investors to understand the rental market.
Discover essential tips on conducting rental analysis to price your rental investments correctly.
Conduct a Neighborhood Evaluation
Evaluate the area to ensure it suits your liking and is suitable for property investment. Check if the neighborhood has amenities that renters prefer. Also, ensure the tenants in that location are respectful and are known to pay their rent on time.
Some of the things to look for when evaluating a neighborhood include the following:
- Availability of malls, supermarkets, and restaurants
- Good schools
- Lots of parking spots or access to reliable public transportation
- Plenty of cultural events, attractions, and parks
- High walk scores
Avoid locations with many closed businesses and underdeveloped areas with disoriented sidewalks or pathways. Further, be keen to choose neighborhoods with manageable noise levels to avoid deterring renters.
Find Rental Comparable
Once you've settled on the area you'd like to invest in, it's time to look into other properties similar to what you have in mind. Real estate comparable allow you, as a first-time landlord, to come up with a rental pricing strategy.
For properties to be referred to as comparable, they have to share certain similarities, including the following:
- Number of bedrooms
- Number of bathrooms
- Same neighborhood
- Size of the unit in square feet
- General property condition
- Days of market
Estimate Rent
When estimating the average rent price, we consider the square footage of the house/apartment. Additionally, the property's condition, whether new, distressed, or updated, and the amenities nearby determine the rent price.
For example, a unit with a sauna and jacuzzi cannot be priced similarly without these amenities. You must note these factors when calculating the cost of comparable per square foot to get precise estimated price rates.
Calculate the Property Costs
Once you've found a decent neighborhood and determined the approximate rent, you need to calculate the costs of your unit. When doing so, take into account the price per square foot. This action helps you establish the real estate profitability of their property.
Take into account the Orlando rental market trends when conducting rental analysis. Some of these rental market trends to consider include:
- Vacancy rates
- Rental demand
- Tenant screening
- Occupancy rate
Seek Professional Help When Performing a Rental Analysis
It's essential to invest in a neighborhood with the right tenants. Ultimately, settle on a property that gives you a positive return every month. Hiring a professional company to assist you in conducting a rental analysis will help you decide on the right unit and price it correctly.
PMI Main Street MGMT is a real estate asset management company that provides high-quality services to commercial and residential property owners. We're dedicated to ensuring customer satisfaction by maximizing real estate profitability while preserving your investment.
Contact us as you begin your rental property investment journey.
