If you own real estate in Kansas City, MO, here's some fantastic news: its population has consistently grown. For instance, in 2014, its population was only 470,860, which has since jumped to 510,704 in 2023, a growth of nearly 40,000!
Since population growth often indicates increased housing demand, renting out your property in Kansas City could earn you generous profits. However, you can't just set any rental price you want. You must base it on the results of an accurate rental analysis.
The PMI Fountain City experts will explain what rental analyses are and why you need them, so read on.
What Is a Rental Analysis?
A rental analysis is a data-driven, scientific method that gives investors better insight into the rental property market's current situation. If you're an existing Kansas City property owner, you can find out how much you can earn by renting your property through this rental valuation strategy. It can provide you with a more accurate picture of how much you can reasonably charge for your property based on factors like:
- Your property's exact location
- Size in square footage
- Number of bedrooms and bathrooms
- The specific type of property you own (e.g., single-family, multi-family, condo, apartment, or townhome)
Once you've provided a rental analysis provider with the above information, they'll check the historical and recent rental market trends in your property's location. Doing so allows them to confirm the market performance of similar properties in the same area. They'll then use their findings to provide a suggested rent pricing range and ROI calculations.
Why Do You Need One?
A rental analysis is one of the most crucial investment strategies because it helps you set a fair price that attracts the right crowd. It lets you avoid underselling your property and setting a rent that's too high, both of which can lead to income losses.
The Cons of Underselling Your Property
When you "undersell" your property, you risk not having enough to cover your operating expenses. Investopedia says operating expenses can be between 35% and 80% of a landlord's gross operating income. Some examples of operating costs are:
- Mortgage payments
- Insurance
- Taxes
- Property maintenance and repairs
If your rental price can't cover those expenses, you'll likely not even have enough to pay yourself.
The Drawbacks of Charging Too Much
Conversely, setting rental prices too high can detract prospective renters from applying. Even if you manage to get tenants, the unnecessarily high rent can make them less willing to renew their lease. If they leave, you'll spend more money trying to replace them and lose income every day your property remains vacant.
PMI Fountain City: Providing Expert and Free Rental Analyses
If you weren't sure how much to charge for your rental property, now you know that a rental analysis is your ticket to certainty.
Luckily, you don't have to do everything yourself because PMI Fountain City can give you a free rental analysis. We'll use our state-of-the-art technology to provide you with accurate reporting of how much you can and should charge for your Kansas City, MO, properties.
So, get started by calling us today and requesting your free property valuation!
