Want To Assess Worth Of Property? Know The Area's Rental Supply

Assessing rental supply in the locality can be a good way to judge the worth of the property you are interested in. Not just the supply, the price at which it is moving in the market is also an indicator. Take a look:

Rental value v/s property prices

In the last few years, owing to the slow pace of transactions in various micro-markets, property prices have been dwindling, although marginally. In a slow market, distress sales are quite common. Those in a hurry to sell are willing to sell for a price cut. If you are assessing the market to see how the locality is performing, go by the rental value. A high value suggests that the locality is in demand and would be a good bet in case you are looking at a property herein from the rental investment point of view.

Assessing the supply

If the rental value is low, it could be because there is a lot of supply which is why homeowners may not be in a position to put up their homes for a higher rent. If you are looking at a purchase here, you would be able to negotiate as well. This is because sellers may be looking at a better price while selling than meager rental returns. If the locality is good and suits your budget, you may plan to be an end-user here.

Assessing the infrastructure

Localities with high rental values also mean that there is an aspect of comfort that suits everyone. This could either be proximity to a job market or schools and educational institutions or areas of interest such as malls, entertainment zones,  or all of these. It is generally noticed that people move where jobs move and by that logic, localities with high rents mean that it is a self-sufficient area, mostly with good roads and connectivity and you can bank on them if you are a prospective buyer.

Assessing the resaleability

The thumb rule behind a good investment is putting your money in the right location. Similarly, if the rental values are high, there is a chance that there is enough demand in the locality on the basis of qualitative determinants. This makes it an apt place to own a home because there is a strong chance of regular renters in case you want to invest for rental returns.

Assessing your target audience

Are you looking at prospective tenants who can pay you a certain amount as rent? The location you are buying into will help you gauge the economic status of your prospective tenants as well. While it may require a higher investment on your side, it will tell you about the kind of rental yield you can expect.