Are you still undecided about investing in Long Island, NY rental properties?
If so, here's an excellent reason to go for it: Long Island is home to two of the "best counties to live in" the state, Nassau and Suffolk Counties.
Such rankings often drive more people to relocate and rent there. So, by being a landlord in Long Island, you can potentially make significant rental income.
That's if you do your due diligence and conduct a comprehensive rental analysis.
We'll explain the basics of this crucial investment strategy and how it can help, so read on.
How a Rental Analysis Works
A rental analysis involves an extensive and scientific evaluation of a property's fair market rental value (FMRV). It eliminates guesswork and busts the myths surrounding rental pricing.
To calculate a property's FMRV, a rental analysis considers the following:
- The property's location, age, size, and condition
- The demand for the property's specific type
- The property's amenities
- The rental price of comparable properties in the same housing market area
So, with a rental analysis, you can set the right and fair rental price.
Benefits of a Rental Analysis
The primary benefit of a rental analysis is that it helps determine a property's FMRV, which is essential to optimal pricing. It also gives insights into a property's potential profitability. Moreover, it prevents you from undercharging or overcharging, mistakes that can lead to losses.
Potential Profitability
Suppose you pay $24,000 a year on your mortgage. Let's also say your property's value is $400,000. So, you'd have to allocate $4,000 if you follow the rule of thumb that says to put aside at least 1% of a property's value for yearly repairs and maintenance.
So, for your rental to be profitable, it should ideally make over $28,000 a year or over $2,333 a month. Luckily, your analysis has established you can charge a fair monthly rental rate of $3,500. In this case, you'll theoretically make a profit.
The Right Price
If you charge a rental fee that's too low, expect a lower bottom line. You may not earn enough to cover your mortgage payments, much less essential property maintenance and repairs.
Conversely, charging more than comparable rentals may cause renters to avoid your property. That can result in high vacancy rates, which means you won't earn anything. Despite that, you'll keep spending money on your mortgage, maintenance, and repairs.
But if you charge within the FMRV established by your rental analysis, you can attract the right tenants. You can market your property at the right price, letting you target prospective renters whose budget is within your rental fee.
Ready for a Free Rental Analysis?
Now that you know how a rental analysis works and its benefits, wouldn't it be nice if you could get one for free?
Well, PMI Lighthouse has you covered. Our expert property managers are ready to give you a free rental analysis so you can determine how much profit you could make from your rentals. We can also help with property marketing, tenant screening and placement, rent collection, maintenance, and more.
PMI Lighthouse is a proud member of PMI, a property management franchise managing over 20,000 residential and commercial properties nationwide.
So, contact us today if you're ready for your free analysis and to learn more about our services!
