Oregon 30-Hour Real Estate Law Practice Test

What type of analysis evaluates competing properties to attract tenants in a market area?

1. Market analysis

2. Competitive analysis

3. Financial analysis

4. Demographic analysis

The correct answer is: Competitive analysis

The correct answer is competitive analysis, which is focused on evaluating and comparing competing properties within a specific market area to determine how to effectively attract tenants. This type of analysis involves assessing the features, pricing, occupancy rates, and amenities of similar properties in the vicinity, allowing property owners and managers to position their properties advantageously. By examining the strengths and weaknesses of competing properties, such as location, the quality of amenities, rental pricing, and tenancy incentives, property managers can develop strategies to make their offerings more appealing to potential renters. Competitive analysis is crucial for ensuring that a property remains desirable in a fluctuating market, as it provides insights that can help guide marketing strategies and decisions about property enhancements or pricing adjustments. In contrast, market analysis takes a broader view, looking at general market trends and conditions rather than focusing specifically on direct competitors. Financial analysis would delve into the economic aspects of a property, such as cash flow and profitability, while demographic analysis examines the characteristics of the population in the area, such as age, income, and family size. These analyses are valuable in their own right but do not specifically target the comparative evaluation of competing properties as effectively as competitive analysis does.