August 24, 2015 Today’s New York Stock Exchange activity was historical. Ouch. We may be in for continued volatility for the near term in the equity markets, which reminds me of how this relates to your rental properties… When I speak with new potential clients, the conversation usually goes something like this…. Property Owner: “I’d like to rent out my house, but I need to get at least $1500 a month because we bought it at the height of the market in 2008 and owe too much on the mortgage still to sell it. Can we get that amount for the house?” Me: “Well, according to the market comps and the demand for your house, I don’t think we can get anything higher than $1300 a month.” Property Owner: “But you don’t understand. I NEED $1500 a month in rent.” Me: “I certainly appreciate your needing to maximize the revenue […]
This is one of the Top 3 questions asked whenever I speak with Landlord and Investors. The answer to this simple question is anything but simple. As with any measurement, the answer is always two words: It Depends. It depends on how you measure rental rates and what data points you are using. Below are some of the ways we track this information on the portfolios we manage: Rent per square foot New Move-In rental rates Renewal rental rates Year-over-year blended rent inflation: This is a method of tracking rent rate growth based on rent growth for new move-ins and renewals. It ‘blends’ the first two rates since both rates operate off materially different consumer behavioral patterns. Stabilized Occupancy: While this is not exactly a measure of rental rate direction, it is a worthwhile tracking mechanism to observe how a portfolio is performing. This is the occupancy level reached by a […]
As real estate investors, opening up the Wall Street Journal can sometimes cause a panic attack. But in June 2015, this article came out giving most investors a sigh of relief and even a tingle down their leg. Spoiler Alert: You’re going to make good money for a number of years to come if you play the market smart. http://www.wsj.com/articles/new-housing-crisis-looms-as-fewer-renters-can-afford-to-own-1433698639 Here’s a few bullet points if you don’t have time to read the entire article (but please read it eventually…) The U.S. homeownership rate is below where it stood 20 years ago when President Bill Clinton launched a national campaign to encourage Americans to buy homes. Conventional wisdom says the rate, at 63.7%, is leveling off to where it was for decades before the housing-market peak. The declines reflect a surge of new renter households, which is boosting rents. Together with tougher mortgage-qualification rules, this will leave households stuck between homes they […]
Is the party almost over for Landlords and Real Estate Investors in residential rentals? Rental rates across the US, Indianapolis metro area included, have been on a consistent tear for a number of years now….Landlords have benefitted allowing the asset prices to get bid up on both rental properties for sale. However, just like with everything in life, there are limits…. Here’s a good article that takes both a granular and high level approach at looking into this pending issue…. http://nreionline.com/multifamily/rent-burdened-nation-housing-expert-discusses-affordable-housing-crisis Certainly, if your local market conditions allow, maximize your rental revenue whenever possible, but keep this knowledge on your radar as we may be witnessing a market shift in rental rates. If you haven’t repriced your properties lately or done a competitive analysis, now may be a good time to get this information gathered. As always, if we can assist, call or click.
If you are a renter, you feel the pinch. If you are a landlord, you feel the bulge in your bank account. Here’s a good article and short video clip from CNBC about the top rental markets in the US as well as how they relate to affordability. http://www.cnbc.com/id/102159830 As Landlords and Real Estate Investors, you should be aware of the relationship between rent values and your tenant’s income growth patterns. As always, real estate is local, so if you need help understanding what is occuring in your area of town, email, call or click. Dan Baldini is the Executive Property Manager of Polaris Property Management, LLC. Dan focuses his practice on the residential real estate markets including Indianapolis, Carmel, Zionsville, Fishers and other surrounding areas. Dan continually seeks out new resources for Team training and education in order to keep all the Team members skills on the leading edge […]