Renting out an Irvine investment property requires reliable rental data and a good understanding of the local market. Before you can list your home, advertise its availability, and find a tenant, you must establish the fair market rental value for that home. This is how prospective tenants will decide whether they want to see it or apply for it.
Once you know the market value, you can establish a rental value for your specific property that takes into consideration its condition, features, and amenities.
Let’s take a look at how you establish fair market rental value before you price your own Irvine rental home.
Conducting a Comparable Market Analysis
The fair market rental value is not a set number. It’s going to fluctuate from year to year and season to season. Market values for rental homes will rise and fall depending on the local economy as well as other factors such as population and demand.
Typically, you’ll look at comparable rental prices for comparable spaces when you’re establishing what residential property is renting for. Take a look at what homes similar to yours inside of your neighborhood are renting for. You want to be as specific as you can when you’re analyzing fair market rental value. If you’re renting out a one-bedroom condo in a mid-rise building, it doesn’t make sense to look at three-bedroom single-family homes in the suburbs.
Keep your location tight as well. Irvine isn’t a small city, and you’ll find rental values are nuanced from neighborhood to neighborhood. The asking price for similar homes across the street from each other could be different just based on factors like school district. Take a close look at property type and property location when you’re doing a comparable market analysis to establish fair rental value.
Accessing Reliable Data on the Irvine Rental Market
Where can you find the data you need for your market analysis?
This can get tricky. While numbers are easily available online, they can sometimes be misleading. For example, if you go to a popular rental site like Zillow or Trulia, you’ll see a lot of rental amounts that might look good to use when you’re checking our fair market value. However, those are asking prices. Those aren’t necessarily the rents that a landlord and tenant ultimately agreed upon. Sometimes, landlords will list a home at the very high end of any reasonable rental range and have to drop the price after a week or two of no responses.
The best data is typically held by an Irvine property management company. You’ll not only get a good grasp of what homes are renting for, you’ll also know how long they remained vacant. This can help you get a comprehensive look at the current rental market and what you should expect going in.
Using Fair Market Value to Establish Rent Price
Once you have the numbers you need, you’ll have to apply them to your own Irvine rental property.
If you’re offering something special, such as an upgraded kitchen, smart home technology that includes a security system, landscaping, or a pool, you can probably charge a little bit more than what the fair market rental value represents. If you are renting a property that hasn’t been upgraded or updated in a while, you may have to drop your price a bit to attract tenants.
Talk to an Irvine property manager when you’re pricing your property to ensure you’re within the market value range and to limit your vacancy time. We can help. Contact our team at HCM Property Management, and we’ll help you price your property correctly.