It's been reported that around 110 people move to Charlotte every single day.
If you're a Charlotte real estate investor, this presents a fantastic opportunity to capitalize on the growing rental market. However, when you buy your first investment property in a new city, it can be tricky to figure out how much to charge tenants per month.
Charging the correct amount in monthly rent is crucial to lowering vacancy rates and maximizing ROI on your rental property. To gain a clearer picture, you must perform a rental valuation.
In today's post, we'll give you a short guide on how to perform accurate rental valuations. Keep reading, and investing in real estate will become a whole lot easier.
Market Comparisons
The first thing any rental valuation should consist of is a market comparison. If you're going to price your rental in a way that attracts renters, you need to know what other landlords are charging per month.
Every apartment seeker in Charlotte is going to look at a wide range of rentals to determine which one to apply for. It's your job to look at other similar properties in your area - ones with similar square footage, number of bedrooms, yard space, etc. - to understand the competition.
Unit and Surrounding Amenities
Another major factor in how much you can ask for in rent is amenities. It's not just the amenities in the actual home that matter, although they certainly do. It's also the amenities in the neighborhood, such as parks, schools, shops, restaurants, or whether there's a good association running the community.
The more amenities your local area has, the more desirable it will be for renters. When it comes to housing amenities, the same rule applies. If you have in-suite laundry, a dishwasher, a large yard, and a finished basement, you can raise your monthly prices accordingly.
Seasons Change Things
The time of year that you're looking for tenants matters as well. People tend to move during the warmer months, from May until August or September. If you're looking for tenants during these months, you can capitalize on the competitive rental market.
Your Financial Risks
Every real estate investment comes with financial risk. The biggest risk for a property investor is making back your money.
A big part of the rental valuation process is looking at how much you paid for the home. Some investors use this as the main method for determining monthly rent prices.
Experts say that you should charge between 1-2% of the home's price for monthly rent. For a $400,000 home - the average in Charlotte - this is $4,000 per month. This is too much to ask for an entire home, which is why many landlords convert a single-family home into multiple units to make up for the cost.
How Property Management Can Help Your Rental Valuation
These are a few rental valuation tips to consider when you buy a rental property in Charlotte. It's not always easy to narrow down the perfect rental price, even using these methods, which is why many new property owners hire property management to help.
A local property manager, like PMI Queen City, has the market knowledge to accurately figure out your rental's worth. Contact us today to schedule a consultation with one of our dedicated professionals.
