According to the Housing and Community Development, one-third of the New Jersey population are renters.
It's a great place to own rental property, but there's so much inventory that it's essential to perform a rental valuation before purchasing anything. Having a rental income estimate can tell you whether you'll earn a decent return on investment from a given property.
There are many ways to do rental valuations and many things factor into them. In today's post, we'll tell you how to nail your real estate valuation with our expert advice. Keep reading and get ready to enter the Ewing rental market the right way.
Compare the Property to Others
One of the first things you can do as part of your rental valuation is to look at other similar rental properties to see what they're charging their tenants. It's important to remember that tenants are savvy. They're always going to shop around in their price range, so you can't stray too far from the average rental price.
Attempting to charge an exorbitant amount for your rental will leave you with long-term rental vacancies. Look at other properties in the neighborhood that offer the same amount of space and number of bedrooms. No two houses are the same, but this can give you a strong guide to start your valuation with.
Look at the Condition
With a property rental price estimate from looking at competing rentals, you've got a guide. From there, you have to assess the state of the home to figure out if you can charge more or less than those other properties.
If the home is in pristine condition with great amenities and is in a great neighborhood, renters will pay more to live there. If it's somewhat dilapidated or the local area doesn't provide much, you may have to lower the rental price.
Local Rental Market Analysis
You also need to consider supply and demand in the neighborhood. If yours is one of the only rentals in a sought-after neighborhood, then you'll be able to capitalize on the raised interest.
When the opposite is true and there aren't as many tenants seeking rentals in the area, you won't have interest to capitalize on. You'll need to lower the rental price as a result.
Your Financial Needs
Many experts will advise landlords to use the 1% rule for pricing rentals. It states that you should charge 1% of the total value of the home as the monthly rental price. The goal of this method is to make a profit as soon as possible.
With the average home costing around $380,000 in Ewing, you're looking at $3,800 per month, which is plenty more than the $2,300 average rental price. To make it all work, many landlords convert single-family homes into multiple units. This makes it possible to earn $3,800 per month on a single rental property.
Get Help With Your Rental Valuation in Ewing
These rental valuation tips will help you get started on your real estate investing journey. Being a landlord is difficult, but it's a lot harder when you fail to price your rental correctly and end up with vacancies.
To avoid this, get a professional rental evaluation from a top property manager. PMI Essential is Ewing's top choice for property management, so contact us today to get help with your rental valuation.
