Updated February 23, 2023
Your success as a landlord depends on making money from your rental property. To generate the right amount of profit, you must understand the value of your property and the factors that work together to set your property up for success.
Where do you start? You might have heard us mention it before. Whether you're starting your first investment property or adding another one to your portfolio, a rental analysis for your Charleston investment property is the best place to begin.
Let's look at what goes into a rental analysis and why it's a critical process to make sure you generate the income you need from your rental properties in the Charleston, SC, area.
What Is a Rental Analysis?
A thorough rental analysis is more than a surface-level look at similar homes in the Charleston market. Instead, a rental analysis digs deeper into market conditions to set up your property for success.
When you work through an analysis of a rental property, you learn how to target the right renters for your property with the right rental price. If the price is too low, you won't make enough money on your property. However, if the price is too high, you won't find any renters willing to pay that price to live in your property.
The best rental analysis looks at more than the property itself. Rental property owners need to understand how their rental home fits into the overall rental market. A good property management company can tell you that there's a lot that goes into that understanding, including a few critical pieces of information you'll uncover through your rental analysis.
Evaluate the Neighborhood
A good place to start is by looking at the neighborhood as a whole. You'll learn how your investment property compares to others and if the quality of the neighborhood could impact the rental rate you could set for the property.
Find answers to a few questions, including:
Are there other rental properties in the neighborhood?
What makes this neighborhood an appealing place for renters?
Is there evidence of frequent crime or other issues that would keep renters away?
Then, consider the neighborhood from a resident's perspective. Think through the things renters look for in a home and community, including:
Close proximity to shopping and restaurants
Easy access to highways, parks, and other local recreation
A safe neighborhood
If you're looking at a potential rental property, use the neighborhood evaluation to help you determine if it's a worthwhile property to add to your real estate investment portfolio. If there are too many vacant properties in the area or the crime statistics aren't favorable, you'll have a hard time finding renters for the property.
Look at Similar Properties
How does your property compare to other rental homes in the Charleston neighborhood? The best property management companies Charleston offers will advise you to look through listings of houses for rent and choose a few homes to compare to your property.
Is your rental property on par with other similar homes? If so, you have a baseline for setting your rental price to attract quality residents.
Check the Property Value
How much is the property worth? The value of your property includes the sale price plus applicable fees and taxes. You can find this data on local government websites.
Compare the value of your property to other similar investment properties in Charleston, South Carolina. When setting your rental price, you need the monthly rent to cover your out-of-pocket expenses, including the purchase price of the house and the taxes you pay.
Can You Compete?
When you gather data about your property, the neighborhood, and the market, you'll have a better understanding of the appropriate rental price for your property. Can you compete with other rental homes in the area while generating the income you need?
Potential renters are smart. They know how much they want to pay in rent each month to live in your property—or a competitor's. To compete with similar properties and attract the best quality residents, your rent price must be competitive.
If you choose a price that's too high—or isn't based on the reality of your rental analysis—you risk an empty property. The best rental price for your property isn't the price you want—it's the price that makes the best sense based on the analysis.
You Can Lose Money Without a Rental Analysis!
It might seem like a lot of work to run a rental analysis. Without help from a good property management company, it can be!
However, when your property goes month after month without a resident, you lose money. Additionally, when your rent is too low, you lose money. Therefore, successful property owners understand the importance of using a complete rental analysis to set the right price and make the most money from their investment properties!
The Right Charleston, SC, Property Managers Deliver a Thorough Analysis!
Save yourself some work and set the right rental price the first time. Choose an experienced Charleston property management company to walk through a rental analysis for you!
The best property management companies Charleston offers already have the resources you need to perform a rental analysis. Charleston Property Company can help you understand the neighborhood, your property's value, and how your property fits into the rental market. We know the value of starting with a rental analysis before setting the rental price and looking for your next renters.
If you're considering a new property—or wondering if you're getting all you can out of your current rental property—let us help with a Free Rental Analysis! If you need to adjust your rental price to generate more income, we can help guide you through that, too.