One of the first things that comes to mind when one thinks about rental property analysis is the demand. This demand will be in the form of number of units available and the amount of income earned by those renting out their place. Of course, the rent of each unit is also a key factor to keep in mind.
In the first place, a rental property analysis spreadsheet has the purpose of taking into account all the different factors that go into determining how much income each unit is going to generate for the property owner. There are many different things that could be included here and some of them are:
Number of tenants that would be coming into the area. Knowing this is very important. It allows the owner to determine how many properties they can actually afford to rent out at any given time. The number of available units available for rent is important because it helps in determining how much profit one is able to generate.
Rental rates in the area. If it costs too much to rent out a certain area, then the unit owner may be able to get rent lower than normal. Knowing the rate of occupancy will give the owner a clear idea of how much he or she can actually make.
Price changes in the area. This gives the owner an idea on how well the rent is doing and where the demand is at. Sometimes, you will find that a particular location will seem like a hot market but then it will start to drop as people begin to realize that rents are a bit higher than usual.
How many rentals a single property would receive per month? This will help the owner understand how many apartments the property is able to handle in a given period of time. This is the kind of information that may change as the new year starts.
Number of years the property has been in business. Many times, the longer a property has been in business, the more likely it is that it is going to pay off on its own. This can also be useful in determining how many years it will take to pay off the mortgage.
These are just a few of the many things that an RTA spreadsheet will include. These are some of the basic things that an owner can do to find the right type of properties to rent out.