Finding your ideal rental rate may feel like a slippery slope. When you choose a rate, you may think that it reflects the perfect mix of drawing interest and not being too inexpensive. But by the following year, you're out of touch with other rentals in your area. Setting a rental rate for houses in Atlanta Georgia can be done quickly, with very little research, but one of two negative things often occurs.
Either you'll aim too low, get a lot of applicants to spend time evaluating, and then not even get all the available money you could get, leaving profits on the table. You also might overshoot your target, get few or no rental applicants, and lose money due to a long vacancy cycle.
These problems can be avoided with research, specifically the research involved in a rental market analysis. While some rental property owners handle this work themselves, many outsource by asking their trusted rental property manager to set a rental rate.
Doing Your Homework: A Rental Market Analysis
The goal of a market analysis is to see both a snapshot of what rentals are going for when it comes to rental houses in Atlanta Georgia, as well as noting indicators that might mean these rates are poised to rise or fall. It requires more effort than you might think, but the reward is the ability to optimize your rate, getting competitive amounts of rent without having to deal with the challenges of too few or too many applicants. Here are some of the major items on a rental market analysis.
Total Available Rentals
Analyzing whether your particular zone is a mostly-rentals, mostly-owner-occupied, or substantial mix is valuable. People looking to live in your area will choose based on what is available. If you happen to own one of only a few rentals in a desirable mostly-owner-occupied neighborhood, you may get a premium for that property.
Types of Rentals Available
Furthermore, the raw number of rental properties tells you less than the number of different options: amounts of bedrooms, square footage ranges, and whether a property is a multi-family dwelling or a single-family home all matter. Again, if you own some of the only two-bedroom single-family rental houses in Atlanta Georgia, in a neighborhood dominated by larger properties or multi-family dwellings, this desirability could boost your rental rate.
If your area has a high vacancy rate, you will want to price your property toward the low end of what you think it could potentially rent for, at least at first. While you can certainly build a reputation and keep a rental occupied in an area with vacancies, it's harder to do that when all renters have a large variety of options and may just aim elsewhere if you price too high. On the other hand, recognizing that there are so few options available can make it possible to offer a higher rate and get multiple grateful applicants anyway, just because it is hard to find a place to live.
Average Rent Amounts Per Square Foot and For Comparable Properties
Comparing your property to other properties isn't an exact science, but there are a few ways to do it. If you can find similar size properties, with similar amenities, in a similar area, their rental rate is a valuable guide mark for you. You can also note the rental rates per square foot of living space in your area and aim to make sure your price isn't wildly below or above that average.
Every application you have to evaluate is work you must do, so charging a bit of an application fee is often valuable, if only to make sure all applicants are serious and willing to put a few dollars behind their application plans. However, noting whether other rentals in the area are waiving their application fee, keeping it very low, or letting it creep quite high is valuable. You can use the size of the application fee to lower the number of applicants or raise it, so it can be a valuable tool when you aren't getting to the sweet spot of "a few, very qualified applicants."
Number of Days on the Market
Rentals that are snapped up quickly tend to indicate that there is room to raise the rent at least a little bit, and rentals that languish on the market often need their prices lowered to find the right person to rent them. Noticing the average number of days on the market for a variety of local rentals can help you see whether the renters in your area are responding to those rates.
Property Managers Track This Info - Work With Us To Save Yourself Time!
As property managers, we want to have an up-to-date rental market analysis most of the time since we're almost always listing a property. When you work with a property manager to rent your houses in Atlanta Georgia, you don't have to do the exhausting work yourself, but. rather just take our information and make your rental rate choice with all that convenient information.