Optimising rental rates with location intelligence

Optimising rental rates is key to operating successfully as a property manager; that much is a given.

However, figuring out how to gain a true competitive advantage in an increasingly congested marketplace is not nearly as obvious.

In this article, we’ll explain how property managers can use location intelligence to go about setting, adjusting and ultimately optimising rental rates across their portfolio.

Location intelligence makes optimising rental rates easier

Here are four of the primary ways you can leverage location intelligence in order to increase profitability:

1) Calculating rates

Calculating rates for specific areas enables you to decide on the feasibility of new investments, or check the accuracy of your current rates.

The more values you consider, the more accurate a picture of an area you will gain. You should look at:

  • Housing stock characteristics (e.g. access to a garden/off-street parking)
  • House/land prices
  • Current rental rates
  • Future rent generation potential

Establishing all this for each potential/existing investment is costly and time-consuming.

However, with advanced location intelligence software, you can visualise all these elements for a defined area simultaneously on your own corporate, secure version of Google Maps.

2) Assessing demographics

Assessing demographics within a defined area enables you to predict how the area may develop over time.

Calculating factors including income, education and cost of living will help you understand the spending power of prospective tenants now and in the future.

For example, spotting an area with increasing numbers of university graduates might suggest a long-term increase in spending power. This is likely to coincide with an increase in house prices and rental rates.

You can then factor these elements into your cost estimates before you purchase a property and set rental rates. Or, you can use them to effectively hone your existing strategy.

3) Planning ahead

As already established, optimising rental rates requires knowledge of future trends. However, these go beyond demographic changes alone.

To establish accurate rental rates for future planning, you should use location intelligence software to look at:

  • Upcoming residential developments – their size, demographics etc. (a feature only available with Periscope®)
  • Amenities and businesses likely to accompany any new developments
  • New public transport and road connections implemented to support developments

Understanding these factors will help you predict new or changing house prices/rental rates within a specific area, enabling you to set your rental rates in line with developing markets.

4) Understanding alternatives

Once you get to know your potential tenants and the specifics of an area, you can identify the options available to them and set your rental rate in a wider context.

With location intelligence software such as Periscope®, you can:

  • Visualise rental rates across your entire portfolio, or an entire region, at the same time
  • Use Council Tax band information to accurately compare similar properties in different areas
  • Deploy the Revenue Predictor to automatically calculate profitability in different areas

This approach can help you develop an overarching strategy for setting competitive rental rates and prevent you from becoming tied to local markets.

Optimising your rental rates should not be a major headache. And, with location intelligence software, you can gain the insights you need to conduct this process quickly and accurately.

Use location intelligence to optimise your rental rates and better understand the commercial property market; sign up for a free Periscope® demo today.