As students returned to their schools this semester, many searched for the ideal home to rent. That's good news for homeowners-turned-landlords. When the housing crisis hit, many homeowners who couldn't sell their properties decided to rent them. But the rental market can be a tough market these days due to falling rents. Reis Inc, a real estate research firm, reported that apartment vacancies hit a 23-year high this past September, due to unemployment weakening the demand. The firm predicts that the rates will climb higher in the fall and winter. The rising vacancy rates are pushing rents down, dropping by 2.7 percent nationwide to an average of $972. The firm says the biggest declines in rent in the past 12 months are in:
- San Jose, Calif.: 8 percent
- New York: 6.8 percent
- Orange County, Calif.: 5.5 percent
- Ventura County, Calif.: 5.1 percent
- Los Angeles: 4.6 percent
- Miami: 4.6 percent
- Las Vegas: 4.6 percent
However, in some locations college enrollment is up and rent in some of those markets is increasing. The demand for duplexes and even single family homes is higher because students are more sophisticated and looking for nicer places to rent. Some property managers report that the students even want to be able to have a dog, so sharing rent for a home is a better option than an apartment. The Register-Guard reported that, "Preliminary figures have University of Oregon enrollment up about 4 percent, bringing an additional 840 students -- some of whom will be searching for housing in the local rental market, upping demand." The average length of time to graduate with a bachelor's degree is about 5.6 years.
If you have a rental property conveniently located near a junior college or university, those students can become your prime rental market securing leases for an extended period of time.
But rental properties, as when selling an existing home, have to be in great shape. With a higher level of inventory in most markets, renters are being picky. The sub-standard properties that once rented fairly easily are now not being considered. Just as in selling a home, landlords are sweetening the deal by allowing things that once might not have been considered such as a small pet. According to The Wall Street Journal, some landlords are perking up their homes and adding renter incentives such as flat screen TVs and even a free month or two rent to retain or attract new tenants.
The National Association of Independent Landlords found that more than 52 percent of its 476 members were renovating vacant properties in an effort to attract tenants. Accidental landlords (homeowners who couldn't sell their homes) view this as an opportunity to also get the home ready for possible resale in the future.
So, if you are trying to rent or, for that matter sell your home, the same rule applies. Look at your property in comparison to those around yours. Take note of what makes yours more appealing and, more important, take note of what areas need some work. If you're willing to spruce it up a bit, you're likely to rent it faster and to the type of tenants that will help maintain it. These days, going the extra mile, when it comes to making your rental property tenant-ready will help your bottom line.