The rental CMA in RP Professional has had good usage since it was launched a month ago. I have had feedback that it is simple to create and that both property buyers and property sellers find it useful.
In fact the uses for the rental CMA have surprised me. Agents, property managers and other property professionals are using it for:
- Property Managers: Building a rent book – running the rental CMA helps convince the landlord you have a rental management competency
- Agents: Present a report at open homes for prospective investors to show what rent they can get if they buy your property. Investors make up an increasing share of buyers. This ‘open home’ report was a surprise to me.
- Brokers: help your investor clients make good purchasing decisions based on the potential rent they will get for a property
- Brokers: assist first home buyers to ‘take the plunge’ through showing them what they can expect to pay in rent vs what they will pay in mortgage costs
- Valuers: show you the gross cash flow that can be expected from a property asset – supporting its value
I am particularly excited by the use of the rental CMA at open homes. It seems to provoke a lot of discussion, even from neighbours who are just ‘popping in to have a look’. These neighbours might in turn start to really think about becoming investors.
So how and where do I run a rental CMA?
The steps of the rental CMA are simpler than a sales CMA:
The indicative rental amount on the report is the median value of the comparison properties that you have chosen. You can go with this or edit it to a different one or use no value at all:
Note that the report include stats from our corporate ‘suburb scorecard’ product produced by our research team headed by Tim Lawless:
Overall, a simple but useful report.
Watch this space though – we will soon have data on the median length a tenant stays, the average number of applications per property that are received, and the length of time a property is vacant before it is re-let.
Let me know how useful the rental CMA is, and if you have other ways of using it!