Posts Tagged ‘rental market’

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.

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.

Fundamentals Driving Rental Business Forward

January 31st, 2012

Fundamentals for apartments are improving more quickly than for other property types, according to National Real Estate Investor, displaying the attraction of renting in the current market.

Real estate data firm Reis reports the national apartment vacancy rate fell to 5.6 percent in the third quarter of 2011, down from an 8 percent peak during the first quarter of the year as property managers saw an increase in business. This improvement, and a coinciding rise in rents, are the result of a number of factors.

According to the source, analysts suggest that improvements in employment, financing options from government-sponsored enterprises and household formation may encourage growth in rental business over the next three or four years. Part of this projected demand would arise from “echo boomers” — adults between the ages of 20 and 34.

Limited apartment supply is also a factor, and experts expect it to remain one for some time. Because of this, and the growing preference for renting among Americans, investors may have an opportunity. The pool of renters for single-family homes and other income properties may be expanded as housing preferences develop.

 

Rental Vacancy Rates Low Nationwide

January 14th, 2012

rental vacancy rates low

Information from real estate data firms indicates that 2011 was an exceptional year for rental business, Multifamily Executive reports.

MPF Research revealed that 2011 occupancy rates were up about 1.1 percent year-over-year and 3 percent since 2009, reaching a national average of 94.6 percent. Occupancy dropped slightly in the fourth quarter, but even the slowdown typical of that time of year could not entirely stop rents from increasing.

Of the markets tracked by the firm, those with the lowest occupancies were Phoenix, Indianapolis, Houston, Atlanta and Las Vegas. The source reports that experts consider Houston and Indianapolis to have consistently low occupancy rates compared to other metropolitan areas, while the other three are recovering from supply problems. Even these five markets maintained occupancy rates above 91 percent.

The strongest performances tracked by MPF Research were reportedly found in Pittsburgh, New York, Minneapolis, San Jose and Boston. Boston had the lowest occupancy of the five at 96.8 percent, and Pittsburgh took the top spot with 97.8 percent.

One expert told the source that rent growth is slowing, but only because it has gone so far already. In that light, rental property managers and owners in most markets can expect favorable conditions that will remain stable if not improve during 2012, the source indicates.

Multifamily Sector Projections Positive

January 6th, 2012

According to a recent report from CNBC, new apartment buildings coming onto the market over the next few years are unlikely to curb demand for rentals or cool the red-hot rental market.

Real estate investment trust executive Richard Key believes that falling interest in homeownership and the recent strong performance of apartments signal a change in consumer attitudes that will continue for at least several years.

Key indicated that an influx of units expected around 2014 will likely be met with strong demand rather than stunting the market’s performance due to oversupply.

“The nice part is we haven’t seen a drop in occupancies with that rent growth,” Key told the source.

Data from the fourth quarter of 2011 seems to support these expectations, according to CNBC. The national vacancy rate hit a new low of 5.2 percent, a level unseen since 2001 that defied typical patterns.

Generally, occupancies decrease during the cold months, according to real estate data firm Reis. The timing of the improvement, therefore, may signal that preference for rentals and other factors overcame typical patterns.

These improvements are taking place despite problems with job creation and economic growth, which typically are seen as limiting factors on apartment business by analysts.

How To Start A Career in Property Management

May 23rd, 2008

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Creative Commons License photo credit: Jug Jones

Are you thinking about a career in property management? If so, congratulations! You’re entering a very rewarding and challenging career that will offer you versatile and ever changing opportunities.

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Get that Dream Rental

April 14th, 2008


Creative Commons License credit: Brian Turner

If you’ve found the perfect rental unit, then it’s possible and probably quite likely that it is also someone else’s dream home. So, to get that dream rental you may have to take some proactive measures. (more…)