After a slow start, Naperville's economy is finally picking up in the post-pandemic era, making this area a promising choice for astute investors.
Any property investment has an element of risk, but you can reduce this by doing a little homework before you buy a Naperville property. This research, known as a rental valuation, is vital for your success as a landlord.
Read on to explore why you should never skip this vital first step when buying a rental property in Naperville, IL.
What's Involved in a Property Value Assessment?
An investment property valuation hinges on two factors, i.e., the predicted resale value of a property (real estate appraisal) plus its potential to generate income (rental valuation). A real estate professional can assist you with both aspects.
You can consult online sources like Realtor.com or the Federal Reserve Bank of St. Louis to gain an overview of current market trends. However, it's best to work with a local expert for a more detailed rental market analysis of the property you're interested in.
These are the basic steps involved in a rental valuation:
Price Comparison
This preliminary step involves researching rent prices for similar properties in the area. You must be sure to compare homes of a similar age and size during this step.
Tenant Evaluation
Look at the employment opportunities in the area, as this impacts tenant demographics. Knowing your target market helps you with pricing and marketing a property effectively.
Local experts can help you get in early on well-priced homes in up-and-coming neighborhoods that are steadily attracting more tenants.
Potential Improvements
You'll notice that some similar properties fetch a higher rental based on extras like solar power or appearance. A property management expert can help you identify high ROI improvements to increase the earning potential of the rental property you're considering.
Based on these steps, you can figure out a rental income estimation for the property that's caught your eye.
Benefits of a Rental Valuation
An investment property valuation helps you set a fair price for your rental units and limit vacancies.
If you charge too high a rent, you'll struggle to attract tenants. Those who set their rates too low may struggle to pay the costs associated with managing an investment property.
A property's income potential directly affects its resale value, so it plays a major role in your purchase decisions.
A Professional Touch Makes All the Difference
Every property investment success story begins with a comprehensive rental valuation. The process requires juggling the costs of owning an investment property with the appeal of reasonable rent rates.
It can get complicated and requires in-depth local knowledge, so it's imperative to get professional help during this key stage.
PMI West Suburban is your first choice when it comes to anything related to property management. Our expert, experienced team is committed to maximizing your rental returns, limiting vacancies, and providing the service excellence you expect.
We have decades of combined local real estate experience and serve hundreds of satisfied landlords and tenants in and around Naperville. Don't delay; get a free rental analysis now and get your landlord journey off to the best possible start.
