Have you ever gone to a pawn shop to haggle over a beloved collectible? You were sure it was worth more than the broker offered, so you left.
An investment property isn't like a trading card that you can look up the price of online. Finding out whether it's worth your money by yourself isn't simple, but there is a way with help.
Read on to learn three benefits of a rental analysis for Kansas City properties.
1. Choosing Profitable Properties
Never forget the three ls of real estate; location, location, location. A rental analysis looks at properties and the neighborhoods around them. That includes:
- Schools
- Attractions
- Restaurants and grocery stores
- Transportation accessibility
- Population demographics
That helps you start with the most desirable areas for Kansas City properties.
The valuation tells you what kind of properties tenants are looking for in the location, whether short-term or long-term. This information helps you create a better rental strategy.
It then narrows your options down by examining the types of properties you're looking for in that area. They should be similar in characteristics such as bedrooms, bathrooms, and square footage.
These comparisons help you find a property with a high return on investment. It'll give you more rental income and a higher price if you decide to sell it.
2. Managing Income and Expenses
Kansas City's rental rates have grown while similar metro areas fell. Its rental increase rate went up to 12.6%. That was the third-highest number among benchmark metros that year.
This makes it more important than ever to set the right rent price. An analysis will help you find one that's fair but profitable. It uses factors such as:
- Location
- Local rental market
- Type of property
- Condition of the property
- Features and amenities
It gives you a rough estimate of what to charge that you can adjust up or down as needed.
This makes sure that you have enough income coming in to stay above water. Only $0.07 of every rent dollar is typically profit. The rest goes to monthly expenses such as taxes, utilities, mortgages, and maintenance.
3. Finding and Keeping Tenants
Rising prices create a difficult rental market. It makes it harder to attract tenants even with the best marketing efforts. Vacancies start piling up and leave holes in your income.
Fill these holes by using a rental analysis to set fair prices. Those low dollar signs become the most attractive part of your listings.
Getting a rental analysis doesn't have to be a one-and-done effort. Do it again at the end of the lease to see if you need to change your rate. This helps keep it fair and can encourage tenants to renew leases.
Get the Benefits of a Rental Analysis
PMI Station offers professional property management services to the KC Metro and surrounding areas. We strive to increase the value of your assets over time and set the maximum rent so they can grow.
That starts with a clear initial idea of what they're worth. Get a free rental analysis today.
