In 2010, Robert Kiyosaki famously trashed the American Dream by pointing out that living in your house costs you money while renting it out makes money.
Owning investment properties is a great way to earn passive income, but only if you get the balance right. If your expenses outweigh your earnings, you're missing the point of owning a rental home.
Keep reading to find out what you need to know about conducting a rental analysis to make the most of the returns from your Georgia property.
What Is Rental Analysis?
Rental pricing analysis is a process property brokers use to decide the best rent for a property. They base these calculations on factors like:
- Location
- The size of the house
- On-site and nearby amenities
- The condition of the house
- Prevailing market trends
They will also use the performance of your portfolio as a guide when suggesting a rental price.
Why Carry Out a Rental Analysis?
Southern states have some of the highest vacancy rates in the USA, so you'll need to work harder to stand out against the competition.
One way to make your Georgia property as appealing as possible to renters is by setting a fair market-related rental rate. If you price your property too low, you'll lose potential income. Too high, and you'll drive away prospective tenants.
If you price your property right, you'll attract more tenants, reduce vacancies, and increase your cash flow. Analyzing the market helps you do this by identifying opportunities and allowing you to adjust to changing demand.
Rental pricing analysis reflects the value of your property against the needs of your target market.
How to Figure Out Market Rental Value
You must add up all the expenses related to your rental property before you conduct a rental analysis and keep this figure in mind throughout the process.
Next, you should research the long-term rental market in your area. Browse the internet for comparable properties to see how they're priced.
Finally, a value-based approach involves estimating the highest rent you can charge according to the value of your property. Zillow has an online tool that can help you with this.
If you're not confident about your ability to do the math, engage with a certified property manager or real estate agent. Thanks to their industry experience and market knowledge, they can give you the most accurate rental price.
If you can't make ends meet based on your rental analysis, there are two things you can do:
- Upgrade your property so you can charge more
- Find ways to reduce your expenses
Alternatively, consider selling it or engaging in short-term rentals instead.
You can charge higher rates for rental properties, and Atlanta is a popular tourist destination, with an average tourist occupancy of 72%.
A Property Management Company Helps Boost Your Profits
An experienced property manager has all the necessary skills to formulate an accurate rental analysis. PMI Terminus will help you set the most attractive rental rates and advertise your home in all the right places.
Once we've found and vetted your tenants, we'll follow up with ongoing customer care to avoid vacancies.
Try our free rental analysis tool and get in touch to get on board with expert property management services for your investment properties in Smyrna, Georgia.
