Whether you rent or buy, California has some of the highest home prices in the nation. Bottom-tier housing in California commands higher prices than mid-tier housing in the rest of the country. If you want to become a landlord, you can get a lot of value out of a California home.
A rental analysis will ensure you get the most value from your rental property. This process highlights what makes your property valuable, how to improve its value, and what you should charge.
If you want to become an effective landlord, start your journey here. We'll go over what goes into an investment property analysis and why you should get one after you purchase your first rental property.
What Goes Into Rental Analysis
Rental analyses look at rental market trends and determine how well a given property can expect to perform in the current housing market. Common factors in assessing the rental income potential of a property include:
- the local employment rate
- the quality of local schools
- ready access to public transit
The property itself also plays a role. Buildings larger than the local average will command a higher rental value. Renters prefer properties with good amenities and curb appeal in the same way buyers do.
Who Benefits?
Rental analyses help long-term property investors the most. If you become an accidental landlord or want to rent your children's spare room now that they've gone to college, you'll benefit less. Fix-and-flip investors can sometimes benefit from a rental analysis if they want to pitch the property to investment clients, but their profits turn on the work they put into fixing the property.
Some markets have more specialized forms of rental analysis. If you want to use your rental property through a service like Airbnb, you should look for a more specific analysis.
How to Get a Rental Analysis
Many property management companies offer free rental analyses for potential customers. You can start building a good relationship with a rental management company during the property analysis process. Your management company can familiarize itself with your real estate investment during this time as well.
Risk and Rental Analysis
Unlike many other forms of investment, real estate has no universal formula for risk analysis. Those who go into the field without taking some time to analyze their market and property often focus too much on returns and not potential risks.
Local property management firms can help. While not unique to specific markets, many risks ebb and flow as local conditions change. You'll get a greater return on investment and reduce the hassle of starting up with a property management company that can perform a rental analysis.
Look Before You Leap
While you might want to start renting your property out as soon as possible, a rental analysis ensures you get the most value from your property. Find a reputable property management firm to start your journey with a free rental analysis.
If your property sits in or near Merced, California, why not look at us? Here at Rental Zebra, we've stayed in business for more than 14 years and three of our team members maintain a broker license. If you have questions about the rental market, contact us today and we'll get you started on your journey.
