Our friends at Rent.com have released their seventh annual Property Owner and Manager Report, representing info from 500 U.S. property managers, to uncover trends in the marketplace. Their findings can be boiled down to one thing: landlords have the advantage.
Here's what they told us about their report:
Vacancy rates are at a low not seen in the last 20 years. According to the U.S. Census, national vacancy rates in the second quarter of 2015 were 6.8 percent for rental housing, down nearly a full percentage point (from 7.5 percent) from the same time in 2014. The last time vacancy rates dipped below 6.8 percent was the fourth quarter of 1985 (6.7 percent).
As the rental market continues to become more saturated, property managers are having to do even less in order to fill apartment openings. In 2015, 55 percent of property managers said that they are less likely to offer concessions in order to fill vacancies than they have been in years past. In fact, 64 percent reported that they are not doing anything different from one year ago, in order to fill vacancies.
Multiple applicants are vying for the same apartments. 54 percent of property managers found it's taking roughly the same amount of time to convert leases, while 33 percent stated that it is taking even less time, compared to last year.
Despite the fact that property managers currently have the upper hand in the leasing process, 56 percent reported that the increased demand has not made them become more selective about potential renters. In fact, only 17 percent reported that they have become more selective about who they rent their apartments to, regardless of increased demand and limited inventory. Higher credit scores, higher income-to-rent ratio and excellent rental history rank amongst the top requirements from property managers.
88 percent of property managers raised their rent in the last 12 months, which is likely to continue 68 percent of property managers predict that rental rates will continue to rise in the next year by an average of 8 percent, which is a two percent increase over the estimated 6 percent rent hike predicted by property managers back in 2014.
54 percent of all property managers reported an increase in the number of former homeowners seeking rentals, thus adding to rental demand. This is an increase from 2014, where only 50 percent of property managers reported the same trend.
Millennials face limited job prospects, lower incomes and high student loan debts, making it harder to buy and easier to rent. 45 percent of property managers have noticed an increase in the number of millennials renters. (Maybe some were living at home, and have moved out into the rental market).
Renters are staying in their apartments longer. According to property managers, 34 percent found that renters are holding on tight to their apartments and renewing their leases (up from 29 percent in 2014), rather than moving somewhere new.
How does this corroborate your own rental experience?
·Rent.com 2015 Rental Market Report [official website]