Determining Supply and Demand for Buy & Hold SFRs

4 Replies

Hello everyone,

I am currently researching local markets in South Jersey and trying to assess the supply and demand for SFRs for these areas in Camden County.  The markets are A-/B+ neighborhoods with pretty good schools, low crime rates, easy access to trains to Philadelphia, lots of restaurants, and good walkability.  Essentially, these areas are desirable for families.  When determining the average rent, I have looked at rentals on Craigslist, Zillow, and Padmapper for the target areas and have only seen 5-7 SFRs listed.  Out of those SFRs, only a few are comparable to the properties I am interested in -- 3BR/1-2BA.

I am curious as to whether you all would consider this a sign of low supply and high demand for renting?  Or low supply and low demand and more families are buyers rather than renters in these areas?  Do you have any further tips and suggestions to determine the supply/demand for renting?  I am researching for local realtors in the area who may be able to answer these questions.

I have also noticed that some apartment complexes nearby that mainly offer 2BR/1BA or 1BR/1BA are advertising free application fees, free first month's rent, etc.  While the type of renters in these apartments may differ as SFRs target more families, would these incentives indicate high supply and low demand for SFRs in the areas that I am targeting?

Thanks for your advice.

There is a great deal of rentals listed on MLS as well as "sign in yard" like fsbo ... In hotter areas the sign is out for a few days and that's all it needs. Of course others are overpriced, etc.

Drive the neighborhoods you are interested in. I can send you rental listings in the areas you are interested in. Keep lookin on Craigslist etc. some of these places don’t even require an online listing. They just go that fast. 

Let’s meet up for coffee this week. 

Steve

Originally posted by @Stephen Kappre :

There is a great deal of rentals listed on MLS as well as "sign in yard" like fsbo ... In hotter areas the sign is out for a few days and that's all it needs. Of course others are overpriced, etc.

Drive the neighborhoods you are interested in. I can send you rental listings in the areas you are interested in. Keep lookin on Craigslist etc. some of these places don’t even require an online listing. They just go that fast. 

Let’s meet up for coffee this week. 

Steve

 What Steve said is truly on point.  Put some boots on the ground to "see" what us going in your target area.

Thanks for the insight @Stephen Kappre and @Calvin Lipscomb .  I am planning on driving my target neighborhoods today.  I am guessing another good place to start is to contact property managers in the area to gauge supply and demand.  Other than all of the above mentioned steps, are there any other indicators to help determine supply and demand for an area (e.g. population, job growth, etc.)?  Based on the description above, do either of you lean one way or the other (low vs. high demand)?  

Updated 6 months ago

So, I spent a couple of hours driving around a few of the target areas that I am interested in. While it's impossible to determine whether properties are owned or rented, I made the following observations: -Most of the houses in the area are older but very well maintained and in quiet neighborhoods just off the main drag. -I saw some properties that were for sale that were not listed on the MLS that are promising leads. -There are a number of foreclosures that are also potentially attractive deals. -There is a brand new apartment complex (mixed use property, 1-3 bedrooms, very modern) on the main drag. -I only saw a couple "for rent" signs at SFRs but was surprised that I didn't see more. In addition to talking to local realtors and property managers, does anyone have any furthers suggestions for the next step to determine the supply/demand in the area?

@Ian Livaich Great move!!  You obtained some good info.  How deep you get into the economics of your targeted community would largely depend on your holding period and how active you are looking to be in the area.  Projected population growth and job growth impacts everything.  If you can connect to an active rental real estate agent who will share their thoughts over lunch about the market in your targeted area that would go a long way.

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