Trends in the Rental Market
It’s important to know the trends in the rental market, and set the right rent rate for your property. You want to charge a tenant an amount that is fair in your market, fair to them, and fair to you.
Recent national data indicates that in many major cities, rents are on the rise, as demand for quality rentals increases. This is attributed to several factors:
- An increase in the number of prospective tenants. Several years ago, the rental market saw an increase in people who had lost homeownership due to foreclosure, and now needed to rent homes. With the overall improvement in the economy, those families are staying in good rentals, close to work and friends. In addition, the millennial generation is entering the rental market, as they graduate from college or trade school, and are getting jobs and finding a place to live.
Older people are also entering the rental market, taking advantage of increased real estate values to sell their homes and move to units where maintenance and community are dependable and desirable.
- In some markets, renting is cheaper than a mortgage. Not everyone wants to own a home. For many people, the month to month payment is more important than building equity, even if they qualify for a mortgage and have enough for a down payment.
- Mobile lifestyles. For many years, the social trend was to find a good job, settle down, and buy a home. Today, many people find the key to success is job hopping, which may involve relocation. It’s much easier to deal with the commitment to a lease than to sell a home if you have to move.
It’s vital that property owners understand these trends, and have a solid idea of their market and how their properties are affected. Are renters in your market looking for single family homes, or apartments in complexes or multifamily buildings? Are they looking for particular services in apartment buildings, such as in-house coin laundry, a gym, a playground for children?
Knowing your market, you can set your rent rate at a competitive level, and decide if a property truly is generating the income you need to make it worthwhile. Here at My Rent Rates, we analyze the data from each local market, to give landlords and tenants an idea how comparable rentals in the area are priced. Sign up for our advice on individual units and market rent analysis, with emailed updates for market changes.
By Alison Street