July 10, 2018
How to Do a Property Management Industry Analysis
If you are a first-time landlord or a new property manager, figuring out which properties to upgrade, what to charge as rent and how to best reach your prospective renters can be a challenge. A property management industry analysis can be an invaluable tool to gain insights into your market.
The first thing to do is to stay on top of trends and predictions. PricewaterhouseCoopers offers excellent third-party reports on the US property management industry. But to estimate whether you are charging enough rent (or too little!) you’ll need to know the trends in the immediate neighborhood of your property. By analyzing your properties’ markets, you can determine:
- What is a fair and competitive rental price for your units.
- Are upgrades needed to attain peak price and greater profits?
- Is there a threat or opportunity to be aware of and plan for?
Analysis of the Current Situation
Here are the key things to look at to establish where your properties are positioned in the marketplace:
What is the renter profile of your area?
Look at the population of your properties’ area. What’s the age demographic: students, young families, or an older crowd? What is the average income of your area? What is the family status? Use this information to form a persona of your ideal tenant. It will help you market your properties and perfect your messaging.
What’s the average rent?
What’s the average rent for comparable rental units in your area? How does this compare to what you are charging?
How do your features compare?
Of these comparable units, what features or perks (free Wi-Fi, in-unit washer and dryer, etc.) do your competitors offer and how do these compare to what you are offering? Do you offer similar features or amenities? Do your competitors offer things you don’t? List these in your spreadsheet.
What defines a premium-priced unit?
What will prospects pay more for? Review the features of premium-priced but similarly sized competitor units with the same number of bedrooms and bathrooms. Then look at the qualities and features that allow it to command that price. Is it a newer unit with higher quality finishings? Does the kitchen have a breakfast island? Is there an on-site gym?
What is the vacancy rate and time in the market?
What’s the vacancy rate for your properties and those of your competitors? How will it impact your rental price? How do the features and rental rates influence the number of days on the market?
Do you need to make improvements?
After reviewing average rents, an apples-to-apples comparison of features and perks, what minor improvements could you make to entice more prospective tenants? This might be a fresh coat of paint, or new appliances and countertops in the kitchen. If you made these upgrades, what impact would it have on your rental rate?
How are your competitors marketing their properties?
Do they have a website for each one of their multi-family units? Do they make use of online applications? Where do they advertise online and offline? How are they positioning their units in the ads? How do their ads compare to yours: are they more appealing, do they have better photographs?
Analysis of the Future Competitive Environment
Are new residential developments planned?
Are there any new construction projects (condos, new multi-family developments or single-family homes) in the area around your property rental? What will be the impact of these new properties?
Are any commercial projects planned?
What new commercial projects will be taking place in your rental area? Are new retail outlets or schools being built? Has public transportation been improved?
For both the current and future analysis research, you can use competitor websites, business directories, city planning announcements, social media, ILS and other rental forums, and tools like NeighborhoodScout and Transit Score.
Once you’ve gathered all the key information in your property management industry analysis, you’ll be able to get clear about:
- How much rent you should be charging,
- What improvements you can make to maximize the rent and,
- How new developments will impact your property.
How Property Vista Helps
Here at Property Vista, all our solutions help property managers make better decisions and improve the customer experience. From vendor management systems to leasing tools like online applications and automated screening, we have the robust solutions and reporting you need. Learn more about our solutions for lease management or check out our pricing.