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.

According to the Kansas City Star, residents in the city’s metropolitan area are increasingly choosing to rent, rather than own homes.

Rents have risen and construction of new rental units is up, the news source reports, to meet the desires of a population who are largely renters by choice. One renter noted it made no sense to buy since he was uncertain how many years he would stay in the city.

One area brokerage manager stated that the long-term commitment a mortgage may require is a major factor, also citing efforts by rental managers and owners to offer higher-quality properties with more amenities, better appliances and furnishings, or other perks.

Another expert told the source that the current single-family housing market has caused people to rethink homeownership, and many have decided they do not want to pursue it. While he said the housing market will likely recover in time, this attitude shift may be an opportunity for investors willing to rent a home to give residents the best of both worlds, allowing them to live in a single-family property without being tied to it long-term.

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.

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.

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.

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.

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.

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.

Having a business degree isn’t necessary but will definitely give you an edge on the competition in the field and will also help you understand and organize the business a little better. While a business degree isn’t necessary, some property management training courses probably are. If your area doesn’t have any classes consider getting as much accreditation as you can online.

If there are local certifications for property managers, sign up for tests and classes and gather all the certifications you can. Join professional management groups and increase your reputation and your networking circle.

A background in real estate will also give you an edge over the competition. Getting a realtor’s license isn’t a bad idea and spending some time working in realty in your area will give you a better feel for the local rental market. Something to note is that large realty companies often have their own property management services and you could work into that department.

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.

Come Prepared. When you meet with the landlord or the property manager, bring along the information that they’re going to want. Gather your credit report, references, a completed rental application and a list of your previous residences and employers with contact information.

Be Persistent. Once you’ve left your information with the property manager, and you are waiting for their response, keep in touch. Don’t annoy them by calling every day, but make a phone call within a day or two just to keep your name in their mind and let them know you’re very serious about the property.

Be Professional. Treat the transaction like a business one so your intent and seriousness are properly reflected. Carefully read the lease, ask the important questions, be honest, and get everything in writing. If you don’t get the residence, ask the property manager to keep your information on file, just in case they get another opening in the near future. And always keep a polite and professional manner.