A Rental Market Analysis is essential in determining the projected rental income for a real estate investment property as well as offering an approximate number of days on the market prior to leasing. The analysis is based on recent rental activity and includes comparable properties in the neighborhood that are currently listed for lease or leased recently. The analysis is based on similar properties built around the same year, similar square footage and located in the same neighborhood.
In order to determine and set an initial rental price, it is necessary to understand multiple factors such as the location of the property, condition of the property, square footage, price per square foot and surrounding school districts. The rental market analysis offers an initial data driven price range based on market research. Secondly, an inspection of the property is recommended in determining property rent. Ultimately, price determination is determined by a combination of market data and a physical inspection of the property when available.
The number of days on the market prior to leasing is an important indicator of price determination. If the property is priced to high, it will extend the number of days on the market and directly correlate to higher vacancy periods. On the flip side, if the property is listed for rent below rental market value, the property will lease quickly, but could negatively impacting gross rental income potential. The Rental Market Analysis will ultimately assist a property owner in determining where to price the property and approximately how long it will take to lease.