Have You Heard..? It’s a Renter’s Market Out There

Rental Market Update  –  Is it picking up or not ?   Phone Traffic is the Clue !

As a whole our phone traffic has been a little better this week.   Prospective tenants have been searching new places to move to and we’ve noticed they ask a lot more questions regarding amenities and rental terms such as who is responsible for water, sewer and garbage fees. 

upward graph

We’ve had calls on a condo that’s been vacant for about 45 days that was finally shown today for only the 2nd time.    We’ve had several new inquiries on a duplex in Roseville that’s also been vacant about 45 days or so and we’ll be showing this weekend to a couple of potential tenants.  We’ve had a decent amount of showings for a Town House Apartment in an 8 unit complex in Cameron Park… one gal has looked at it 3 times now.  We’ve rented up 2 of them in the last 2 weeks after we lowered the rent schedule.

We took a Holding Deposit on a Town House apartment in a small 13 unit complex in Roseville the day after the other tenant moved out.    We’re now in the process of getting it “rent ready”.    On this complex, we had to lower the rents to a new “price point” that finally worked.   Since then, we have rented up 3 units in this complex that were vacant for over 45 days.

A small amount of calls have come in on some  2 bedroom 1 bath flats in Citrus Heights that have been vacant for 2 months…but no applications to rent.    The reason for this in their case is because of a lack of “amenities”, in my opinion.   So when you couple that with a “tenants market”, you’ll find that good prospective tenants are looking for more value and utility for their money..

The only way to compete is to offer a “rent special” at move in, or perhaps lowering rents if you have an extended vacancy period.

 

Make it a great day….

Ed Favinger, Broker, CRS, GRI

favinger@rwnetwork.com    916-203-1260

If Rents Are Going Down…? What Can You Do About it…?

 

Start By Investing in a Good Area.

I know that headline is really something you’ve never heard before…(yes my tongue is in my cheek).

Let’s  assume here that your rental property is in a decent enough area that you haven’t had to take your Pit Bull dog and a side arm with you to collect the rent ok…?

Ok Now What…? Your Property is Vacant…!

Part of the problem in today’s market with turn over in rental units is that many good tenants are moving up to Home Ownership after several years as a Renter.

Those renters are also in competition for the Re-sale Inventory with Investors that have a lot of cash and equity that is looking for a more stable and secure equity position.    We also have low interest rates for those investors and first time buyers that are able to qualify for a loan.  I bet you didn’t know that many of the transactions today are “all cash” with no financing involved at all.

I’m giving you this background to show you that there is competition among many Landlords for the same prospective tenants.

Here’s a good exmaple of what I am talking about.   Our Management Company recently leased up two homes in Folsom, one in the Broadstone area and one in Empire Ranch.   Both of these homes started out at $2,350.  They pretty much had the same amenties, such as Granite Counter Tops, 3 car garages and were well landscaped.  The Broadstone home was a 5 bedroom while the Empire Ranch home was a 4 Bedroom.

During the course of showing these homes, we were amazed at the number of prospective tenants who wanted us  to negotiate a “reduction” in the rental rate we advertized.   Only those propects that were interested in these houses asked us.   All the others…..?    just thanked us for our time, but told us “they were still looking”.  

At first we resisted lowering the rent but as the weeks went on, I realized that the market had changed and become more competative.

And So…?  Yes…. we did in fact lower those rents and both homes now have well qualified tenants.

Don’t forget that during this time period, when our staff met each week to go over our  “available rentals”  that we had on the board,  we’d also discuss phone traffic, comments made at showings,  email inquiries and “pending applications”,  if any.

Our Conclusion…?

We decided to get ahead of the market and to offer specials, such as 1/2 off the 1st months rent,  some “move in date”  flexibilty and an across the board reduction on our asking rents.   This is also a slower time of the year with folks moving and we do have some “unemployment” that is causing rents to be a little flat today.

In addition we’ve kept track of the competition in our service areas so we know what is a reasonable rent for each product we have to offer.

To get an idea of what prevailing rents are, take a survey of the immediate area surrounding your property, contact a property management or two to get their input and do some “web research”    Check out this little information site that I think is useful:   http://www.rentometer.com/  

I don’t want to beat a dead horse here, but please remember that “curb appeal” and “condition” will now play an even bigger part of not only getting top dollar rents, but in the amount of inquiries you receive to get you that great tenant.  Tenants can be picky in a “Renters Market”.  

 

Make it a great day….!

Update on Rental Market – Nice Units Rent Fast – Even in Slow Market…

 This article was original posted on Tuesday, March 31, 2009 at our old website

Update on my March 20, 2009 post – It’s Back to Basics.

I’ve been in the Property Management business for going on 20 years now.  I actually got into it by accident because clients that lived out of the area especially wanted someone here local to watch out after their investment.

Over the years, the practice of property management has given me many insights into “what to do… and what not to do”…

So while I was a little nervous about the rental market as reported in my last two posts, I was reminded again that when you have a property with great curb appeal, that is updated and bright & clean inside…?   You just don’t have to worry too much if you have priced it fairly, which we did.

Click Here for a look at the WebFlyer we used to attract new tenants.

Our clients had purchased 2 duplexes on this street, each one with a 3 bedroom, 2 bath and a 2 bedroom, 2 bath side.  We now have “approved applications” with “holding deposits” for move in with rents are $1,200, $1,250 for the 3 bedroom sides and  $1,100 for one of the 2 bedroom units.  

In addition we have two applications pending for the last remaining 2 bedroom.

The bottom line in my opinion is that if you the investor provide a great curb appeal and a nice unit inside, you’ll have many happy prospective tenants wanting to live there and pay you top $$$.

 

In the mean time…?

 

MAKE IT A GREAT DAY….