The pressure of limited rental housing supplies has had several effects, such as encouraging investors to convert a significant number of single-family homes into rentals. Landlords and rental managers have also found themselves with less need to offer incentives that were commonplace pre-recession, when homeownership was on the rise and rental demand was at historic lows.
Additionally, various fees associated with rentals are going up in many cases. Administrative fees, charges for allowing pets and similar costs have risen in recent years. Owners and operators who are thinking about raising or restructuring fees should take into account the limitations that laws and regulations define. State, local and federal lawmakers have been focused on the real estate industry recently, and fee levels or increases may be constrained.
As construction and conversion adds to the number of available rental properties, competition is likely to increase. Demand will reach equilibrium with supply at some point, which may lead to fee and rent decreases. In the meantime, owners and managers should ensure that their fees are all at acceptable levels and are disclosed properly.