Monroe is one of the priciest cities for homeowners and renters alike, with average rent prices sitting at just under $3,000.
If you're looking to invest in property here in Monroe, you must perform a rental valuation. This will tell you ahead of time how much you'll be able to charge per month for your rental. Knowing your rental rates, you can project how much you'll make on a rental investment before you invest.
In today's post, we'll tell you how to do an accurate rental property evaluation. With a bit of rental market analysis and research, you can maximize your rental income, so keep reading and take property profitability seriously.
Rental Market Analysis
Always start your real estate valuation with a rental market analysis. By looking around the area at other similar rental properties, you can glean some information on the real estate and rental markets in Monroe.
Make sure you're looking at homes with similar basic characteristics as the ones you're looking at. The most important metrics are size, number of bedrooms, and how updated the unit is. Doing this important research will give you a baseline for understanding how much ROI you'll get from a property.
Unique Amenities
Does the home have any unique amenities that set it apart from other rentals? New appliances, outdoor space, space for parking, or anything else that most rentals don't provide can help you attract more renters, which gives you more wiggle room on pricing the rental.
Don't neglect the amenities in the local area, either. Where the property is situated and what it's situated around matters. For example, young families will pay a premium to rent near good schools. Young singles prefer to be surrounded by nightlife, boutiques, and cafes.
It's also important to consider things like parks and walking paths, grocery stores, and proximity to public transit. All of these things make a rental property more desirable.
Rental Valuation Models
Once you've looked at the more concrete factors for assessing a rental property's value, you can look at some mathematical models that account for your financial needs.
A gross rent multiplier, for example, tells you how many years it'll take to pay off your property at a given rental rate. The capital asset pricing model (CAPM) looks at the relationship between the risk of investing in a property against its potential return.
To get the CAPM, you look at the age of the property, operating expenses, location, and net cash flow, among other things. Finding a property with a balance between risk and reward will give you a comfortable and profitable rental unit.
Maximize Rental Income with PMI Turn Key NJ
Every property investor must perform a rental valuation before purchasing a rental property. If you don't, you're going into the world of being a landlord completely blind. You won't know exactly how much to charge your tenants, which can hurt your ROI right away.
If you need help performing a thorough rental valuation, a property manager can help. At PMI Turn Key NJ, we're Monroe's number-one property management company and part of the country's largest property management group. Contact us today to get your free rental valuation and learn more about our other helpful landlord services.
