Whether you’re a seasoned investor or just starting your research into property investment, you will have undoubtedly heard of rental appraisals. Most property management and real estate companies offer a rental appraisal, rental valuation or property appraisal in some form or another. It can be confusing trying to navigate through all of the conflicting information, so we’ve put together a guide to rental appraisals so you can make informed decisions about your investment.
We’ll take you through what a rental appraisal is, why and when you need one as well as what you’ll find in your report. As property managers, we also have a rental appraisal offer, so once you have a comprehensive understanding, we’ll let you know what makes ours different from the rest.
If you want to skip straight through to the Access Property difference, click here.
What is a rental appraisal?
Simply put, a rental appraisal is an educated estimate of a rental property’s potential value. Not to be confused with a valuation, which is commonly used in legal matters, an appraisal will give you an understanding of the rental price you should be charging rather than the value of the property itself. In most cases, you will also receive a rental appraisal report that details the factors behind the expected rental price that has been provided.
Do I need one?
Whether it’s a new property or you want to make sure you’re getting your money’s worth, a rental appraisal is a crucial step in many phases of your investment journey. They help take the guesswork out of your investment strategy by keeping your rental competitive and ensuring growth and returns.
To gain long-term investment growth out of your property, you need to have a good understanding of what it’s worth. Not only will you be able to charge the right amount of rent, but you will be more likely to attract and retain quality, long-term tenants while also decreasing the amount of time between them.
Although you may conduct enough research online to attempt one yourself or use an online calculator, getting a professional rental appraisal is the best way to get the most accurate results.
Not sure what are the next steps for your investment? Check out our guide on deciding whether to sell or rent your property.
When should I get one?
There are a few different times in your investment journey when a property appraisal is a smart step. Some of them include:
Purchasing a new investment property
When you first purchase an investment property, or even while you’re considering it, a rental appraisal is a crucial step. It will allow you to make an informed decision about whether to invest, as, unfortunately, not all rental properties will generate the returns you’re looking for. In some cases, when applying for an investment property home loan, lenders may want to see a rental appraisal.
Looking to purchase an investment property? Make sure you check out our checklist here first.
At the end of a lease
Prior to sourcing new tenants, you should get a rental appraisal, particularly if the previous tenants lived there for a while or significant market changes have occurred during that time. Understanding the most up to date value of your property will help unearth opportunities for you to potentially increase its appeal or even the rent price to maximise your returns.
You want to get maximum returns
If you have owned your property for some time but haven’t had an appraisal recently, it might be time to check in. The property market is constantly moving and evolving, so it’s important that you stay up to date with what’s going on. If you have a current property manager, you should be able to ask them (or better yet, they should proactively let you know). However, it may be in your best interest to shop around and compare your findings.
Having a great property manager to support you is a must. You can use our checklist to make sure yours is up to scratch.
What’s in my rental appraisal?
As the saying goes, “location, location, location”. Although it isn’t everything, place is vital in a property’s potential rental value. Your report will consider its proximity to public transport, schools, shops and restaurants while also looking at historical market data for the suburb and its surroundings to get an idea of trends.
Your appraisal will then consider what your property has to offer potential tenants, such as the number of rooms and bedrooms, parking spaces and amenities.In some cases, the report may give you details of the property’s rental or past sales history.
Using the location and property information, your report will contain a comparative analysis of similar properties in the area to see what they rent for. It can also consider what makes yours stand out from the competition.
To get an accurate idea of your property value, your rental appraisal should consider the current market conditions. Property market trends such as vacancy rates are a significant factor in evaluating the competitive place in the real estate market.
Estimated rental value
Using the above information, your rental appraisal will recommend what you should consider charging every week. Some people choose to include additional expenses such as internet and electricity in this price. You should consider your rental appraisal price estimate as a guide and research comparable properties advertised in your area.
The Access Property Management difference
We’re committed to helping Perth investors successfully navigate the market. Here are just a few ways we take the extra step when evaluating your property.
Perth market expertise
Our unparalleled knowledge of the local market means we provide a more detailed and wider overview of your long-term investment potential. We don’t just focus on one suburb or location, so we have a holistic overview of the Perth market and no competing interests. We’re confident that our expertise can play a vital role in driving long-term returns.
We come to you
We don’t just crunch the numbers. We’ll take the time to meet with you at your property to take an in-depth look at its condition. This also allows us to get to know you, as you get to know us. By gaining a deeper understanding of your investment goals, we can work out how to reach them together. Once you’ve received your detailed report, you can ask us any questions you have.
Although they can be a convenient option, online forms and calculators can miss important details about your property. By taking the time to see your property in person, we can give you additional advice about making the most out of your investment.
We won’t just tell you what’s good about your property, we’ll also look out for things that can cause big headaches down the track. This allows you to take care of any issues that can be fixed before they become bigger problems.
We’ll also look for quick, easy wins that can help increase your property’s value. We focus on providing simple tips to lower your expenses or increase your property’s earning potential.
Reach your investment goals with Access Property Management.
Want to find out how much your property could be worth? Request a free rental appraisal today to find out.
In the meantime, if you have any questions about your property investment journey, you can get in touch with us here.