Archive for the ‘Rental Property Management’ Category

Young renters flock to Oklahoma

February 11th, 2012

Property managers and rental owners in Oklahoma are seeing more echo boomers and millenials, The Norman Transcript reports, two groups of young adults who are driving rental activity and construction higher.

Millenials, between the ages of 25 and 34, are currently an expanding demographic in the area. According to Advertising-Age, the percentage of millenials increased 12.2 percent between 2000 and 2010, making it the fifth-ranked state in the nation for growth of that demographic.

Given that young adults are traditionally renters and some experts say their arrival is a predictor of economic growth, rental property owners are reportedly looking forward to the future. The older echo boomers fall into the category of young professionals, which one industry broker noted represents a prime demographic for the rental housing sector.

With the population looking unfavorably on homeownership at the moment, these young adults may want to rent houses rather than buy them, creating an opportunity for property owners investing in the area.

This year is expected to see the continuation of 2011 trends, such as increasing rents and occupancy, which made last year a relatively good one for are rental housing stakeholders.

Investor opportunity in Phoenix rentals

February 9th, 2012

According to GlobeSt.com, demand for rental housing in Phoenix is expected to level off this year after a moderate increase during 2011, though investment activity is expected to remain strong.

Such an increase in demand would represent a continuation of the trend that marked 2011, in which demand was high enough for rents to increase sharply. Net effective rents rose 12 percent overall since 2009, one expert told the source.

The demand for rental housing is high enough that construction of several new apartment units are planned, indicating there is likely an opportunity for investors to purchase profitable rentals in the area. Rental property services are available for those who wish to own a property without operating it.

According to the source, Phoenix has been the target of significant investment recently because of the market conditions. One aspect of the market that has improved recently is the number of real estate-owned properties in the metro area, which decreased in 2011.

Some investors are reportedly pursuing value-add deals in the area to better appeal to prospective tenants. Colliers International executive Brad Cooke told the source this year would see a shift from REOs to traditional sellers.

Rental construction up in Twin Cities

February 9th, 2012

Property management companies and landlords in the Twin Cities may be benefiting from high rental demand.

The Keystone Report for the Builders Association of the Twin Cities shows permits were issued for construction of 465 new units in the are during January, the organization reports, more than double the number begun during the same month in 2011. Curt Christensen, Builders Association president, stated that 2012 is expected to be a good year, based partly on this beginning.

While the number of permits issued was actually lower by about 10 percent at 185, this is because the new units are being distributed throughout fewer buildings. Almost two-thirds of the units are located within just five buildings. One is in St. Paul and one is in Hudson, with each of the two holding about 44 units.

The other three have a combined 177 units, and are all located in Minneapolis, showing that builders perceive high demand for rental housing there. Rental managers may find opportunities in the area, while investors should note that this indicates unmet demand exists there.

Report: Fewer tenants renewing leases

February 7th, 2012

Property managers may want to step up their efforts to retain tenants, given the results of a recent survey.

Research by Kingsley Associates indicates that the number of renters choosing to renew their leases dropped to a three-year low in the fourth quarter of 2011, though analysts suggest tenant satisfaction with current rental properties was stable during the period.

“As renters themselves recover, there are indications that more of them are renting by choice,” said Kingsley Associates principal John Falco. “They aren’t unhappy – just choosy.”

Tenant satisfaction dropped only 0.1 percent from the previous quarter, according to researchers, and has been stable for three consecutive periods now. This suggests that owners and property management companies are not driving tenants away.

According to the report, 32 percent of surveyed renters had incomes of at least $75,000, higher than the 30.7 percent with incomes of less than $40,000. This result reportedly represents a deviation from recent years.

The number of renters 55 or more years old also increased to 13.4 percent from 12.6 percent in the period ending in the second quarter. The number of residents who live alone grew more than 2 percentage points, reaching 45.9 percent of those surveyed.

Tenants’ finances may be stretched by rent growth

February 7th, 2012

Multifamily Executive reports that data from sources (including rental data firms MPF Research and RealFacts) suggests rental managers may need to stop increasing rents soon.

Property management companies and rental owners increased rents an average of 2.3 and 4.7 percent during 2010 and 2011, MFE notes, but the Bureau of Labor Statistics only reported 2 percent growth in wages year-over-year during the third quarter of last year.

This suggests rents may significantly outpace wage growth, analysts say, threatening to price residents out of their units. Data from RealFacts suggests this may be happening in some markets already, according to MFE, with one executive reporting that more tenants are moving out due to rent increases than in the past.

While rents did drop in some areas during the fourth quarter of 2011, however, the source notes that it is traditionally a slow quarter and may not be representative of a meaningful trend.

MPF Research’s Greg Willett noted that eventually, rent increases may cause tenants to feel they can no longer afford a property. Analysts question when that point will be reached, according to the source, although some signs indicate that wages may rise moe quickly this year than in 2011.

Bedbugs a returning problem in rental housing

February 5th, 2012

Bedbugs are a growing problem in the Chicago area, according to the Chicago Reader, and may be in the state and the nation as a whole as well.

The pests seem to have re-emerged in the past decade, the source reports, after being rare since the invention and use of DDT and other pesticides in the 1940s. The banning of DDT may have contributed to the problem and some suggest international travel and an improved resistance to pesticides as possible contributing factors.

According to the 2011 Bugs Without Borders Survey by the National Pest Management Association and the University of Kentucky, 99 percent of more than 1,000 pest control companies in the nation encountered a bedbug infestation within the year leading up to the survey. A decade earlier, the same survey found only 11 percent reported finding one.

One thing that makes dealing with bedbugs difficult, according to the source, is that federal, state and local laws do not generally describe landlord and tenant responsibilities. Rental property management firms, landlords and tenants may be unable to determine who is responsible for bringing them into a property.

An Illinois Department of Public Health’s Structural Pest Control Advisory Council subcommittee considering the issue recently suggested that tenants be responsible for reporting the problem and landlords be tasked with exterminating the creatures.

Many industry members favor REO rental strategy

February 4th, 2012

Amid discussions of how best to deal with the number of foreclosed homes currently in the inventories of the Federal Housing Administration and its sponsored enterprises, Fannie Mae and Freddie Mac, HousingWire reports that panelists at the American Securitization Forum stated they are leaning toward rental conversions.

The idea of converting foreclosed homes into rental properties has been under discussion for some time, with some suggesting it would reduce inventory and help the market. The degree of government involvement in such a program has varied between proposals.

Individuals, including Federal Reserve Bank of Boston senior economist and policy advisor Paul Willen, have indicated such a plan might not be successful. According to Willen, the number of properties in circulation may essentially be unchanged and the program will not necessarily address the oversupply problem.

On the other hand, the source notes, the Federal Housing Finance Agency is already considering program structures that might be used if the government goes forward with an REO rental conversion plan.

Depending on the details, such a program could represent a chance for investors and property managers to get involved in a housing recovery while meeting consumer demand for rental accommodations.

Chattanooga saw high rent growth in 2011

February 2nd, 2012

Data from Reis analytics firm indicates that Chattanooga, Tennessee ranked third in apartment rent increases during 2011.

Former Chattanooga Apartment Association president Becky Brooks reportedly told the Chattanooga Times Free Press that new business and industry moving into the area is the root cause, bringing jobs and activity. In particular, Volkswagen has hired 2,500 people over the past three years, according to the news source, while local suppliers have added more.

All those workers need somewhere to live, and property management companies and owners in the area have reportedly benefited from a 3.8 percent increase in effective rents during 2011, compared to 2.3 percent for the nation as a whole. There was reportedly an increase of 1.3 percent during the last quarter of the year, which Reis’ Brad Doremus described as strong growth.

The average effective rent was $625 a month, still well below the national average of $1,009 a month despite the growth – according to Reis. This may also have played a part in attracting residents. Brooks also noted that, of those who have the option of buying a home, many see it as an unwise investment and prefer to rent.

Noteworthy Trends in the Rental Arena

October 21st, 2011

Here is a recent article from DSnews.com regarding the multifamily sector. There are several interesting facts about the overall trend of the rental market in this piece. Below are a few noteworthy points that deserve mention:

There has been a reversal in homeownership trends, and as this rate falls, demand for rental properties increases. As a result, apartment vacancy rates have declined and rates for rentals have increased.

Vacancy rates among professionally managed buildings are at their lowest levels since 2007.

Freddie Mac’s chief economist Frank Nothaft states, “The improvement in the economics of apartment management has prompted an increase in structure values, property sales, and new construction for larger buildings.”

Decline in homeownership has been greatest among the under-30 demographic.

An increased demand for apartments has pushed up the price of rents since the recessionary period of 2008-2009.

(Image sourced from DSnews.com)

“Homeownership Decline Spells Good News for Rental Market”

October 17th, 2011

2010 census data released last Thursday highlights an important trend in the rate of homeownership not seen since the Great Depression. Patrick Newport, an economist with IHS Global Insight said, “The changes now taking place are mind-boggling: The housing market has completely crashed and attitudes toward housing are shifting from owning to renting. While 10 years ago owning a home was the American Dream, I’m not sure a lot of people still think that way.” (See the full related article here: Hope Yen of the Associated Press)

The question to ask now is, “What does this mean for the rental market in the short to medium-term?” For starters, the existing national level of homeownership rests at 65% vs. 35% for rentals. Given that Americans will likely be facing the burden of a harsher economic environment comprised of prolonged unemployment, decreased government involvement in housing, and limited credit with tougher lending standards, we can safely assume that the 35% share for rentals will increase over the coming years.

Based on this, we at All Property Management foresee an increased demand for rental properties that will lead to a demand for professional management services. With economists predicting conversion to rental properties rather than sales as a way to stabilize the housing industry and position it for future growth, All Property Management is well positioned to address what will be an increasing need to access professional property managers.