Rental market slowing ?

Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

Pricing or advertising? A week vacancy with a 20-30% rent increase yoy is worst case. Maybe ask other PM’s in your market what they’re experience is lately. Maybe your PM lost a key employee or is cutting costs somewhere that used to pay dividends?

OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @Bill B.:

Pricing or advertising? A week vacancy with a 20-30% rent increase yoy is worst case. Maybe ask other PM’s in your market what they’re experience is lately. Maybe your PM lost a key employee or is cutting costs somewhere that used to pay dividends?

Been with this company for 4 years and they manage 1000+ properties. Also just rented two properties in April no problem. Going to call them on Monday again but really have a feeling this is a market change rather than PM company problem. Good idea to ask other PM companies.

Colby Sullivan

Member since 2021 · 5 posts · 10 votes

It took me a month to find a qualified tenant that I thought would be a good fit for my own property in NW Fl. Lot of people are tire kickers, dont meet the income or credit standards

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OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @Tyler Gibson:

Quote from @Rongsu Qi:

Have a nice little 3/2 on the market for a few weeks, about the lowest price in 5 mile radius. Lots of contacts, 20+ showings, 3 approved applications and yet still not rented. Talked to my leasing coordinator from the PM company on Friday and was told all rentals they manage in the broader Orlando area are at least 2-3 weeks now. Ones in a more remote location are not moving at all. They manage 1000+ properties, mostly blue collar properties I think.

This is very unusual. We should be in the peak season for rentals now and past years we tend to rent higher and faster in the summer than the winter. Also, I just had two other units listed in April and one rented in 3 days (priced below market) the other two weeks (priced higher end of the market).

I'm wondering whether we're seeing the inflection point of the rental market. My guess is people have ran out of pandemic stimulus money and rental assistance, and other savings they may have. With inflation in food and especially gas, they just simply can't afford to move, or maybe even downsizing/downgrading.

Anyone seeing similar trends in your market?

This is the first I'm hearing of it. Everything i year is still that there are no rentals available. Perhaps it is more of a pricing issue. I'll have to talk to my PM parents and get an update.

Would love hear other PM’s experience. What you heard was definitely what I experienced too back in April. My rental is in Sanford. Looking on Zillow there are a lot of rentals now, all $2000+. Mine is currently under $1700 and decent condition. Based on the number of showings and applications my property has received, it should have been rented already.

OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @Colby Sullivan:

It took me a month to find a qualified tenant that I thought would be a good fit for my own property in NW Fl. Lot of people are tire kickers, dont meet the income or credit standards

Exactly what I experienced this time. First approved applicant couldn’t come up with the deposit for weeks. Second went with another property they say. Third hasn’t responded after approval. I think renter mentality is changing.

Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

I haven't seen it in my market or heard about it in other markets. Everyone's still experiencing low inventory and high demand. House prices are at an all-time high and interest rates have jumped significantly in the past year, so fewer people can afford to buy and are looking to rent. I anticipate high rent demand and increasing rent rates for another 1-2 years.

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Pat L.

Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes

We have a waiting list on our apartments & our high end SFR just had our 5th Coast guard Chief move in for his 4 yr tour. Rents are still very high here & vacancies go fast. Our niece just moved back to NYS from St Petes & is paying $1400/month for a 750 sq ft dump.

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

No, the ratios you describe are an indication that people don't see the value or don't like the place.

Scott Mac

Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes

10% inflation and gas prices through the roof, might be a lot of people can not afford to do anything but go to work.

Meaning their expendable income (which is not very much for most paycheck to paycheck people) has been eaten up by these two dragons.

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John MorganPro Member

Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes

The rental market is still hot in Texas for B and C class rentals. I'm in the DFW area and cheap rentals under $2000 get snapped up fast due to low supply. I just rented out a new SFR for $2100/month the day I closed. It needed at least 10k of inside work to make it rent ready. The tenants took it "as is" so I gave them their first month free since it was in terrible condition inside needing painting, repairs, kitchen appliances and cleaning.

Curtis Mears

Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes

@Rongsu Qi

In Raleigh, I can rent properties in 2 weeks. I only have 5 to 12 showings and 1 or 2 applications, but I screen out unqualified early so as not to waste time.

Ryan KellyBusiness Member

Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes

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@Rongsu Qi check the inventory levels in your area. You may have a high number of new rentals to compete with, which would slow down occupancy.

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OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

@Ryan Kelly and @Marcus Auerbach

Thanks for all insights but things still don't add up.

This property rented in a week back in March 2020, at the start of the pandemic for $1300, right at market level back then. It's listed at $1675 now, pretty much the lowest price in a 5 mile radius. Almost every 3/2 houses in the area are 2000+. Even if people don't like the place, the price point compared to all others on the market would help them make the decision already.

@Ryan Kelly

OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @Nathan Gesner:

I haven't seen it in my market or heard about it in other markets. Everyone's still experiencing low inventory and high demand. House prices are at an all-time high and interest rates have jumped significantly in the past year, so fewer people can afford to buy and are looking to rent. I anticipate high rent demand and increasing rent rates for another 1-2 years.

This logic makes sense but I wonder if they can even afford to rent after rental prices have gone up so much? Broader Orlando area has seen one of the highest rental increase in the past 2 years, where wages have barely grown.

OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @Scott Mac:

10% inflation and gas prices through the roof, might be a lot of people can not afford to do anything but go to work.

Meaning their expendable income (which is not very much for most paycheck to paycheck people) has been eaten up by these two dragons.

I agree.

Carlos Gonzalez

Investor · Phoenix, AZ · Member since 2015 · 346 posts · 170 votes

@Rongsu Qi

It’s probably only your area. Here in phoenix the supply still low and demand for rentals are sky high.

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

You are looking for external reasons @Rongsu Qi, but you have to ask yourself this: you are priced well, you had a good number of showings, you had even approved application - but they chose to rent another place, potentially even paid more.

In most markets, at most times, over 80%, maybe over 90% of all apartments that are vacant will rent. That leaves you with the bottom of the barrel nobody wanted. I have been renting houses for almost 15 years, I have never had a vacancy for more than a month. We have a national housing shortage right now, demand is red hot.

I have seen this many times, especially with out of State investors. Your next move is to check it out in person, odds are you will know why it did not rent the second you open the door.

Christina M.

Rental Property Investor · PA · Member since 2017 · 69 posts · 60 votes

@Rongsu Qi. I had a rental early 2022 priced it high on purpose lowered rent in Spring received quite a few applications no one qualified income or credit. Rented in May to extremely qualified applicant.

Today first time ever have 2 rentals go on market 1 Apartment and 1 Single Family this will be a good indication of the market for me.

OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @Marcus Auerbach:

You are looking for external reasons @Rongsu Qi, but you have to ask yourself this: you are priced well, you had a good number of showings, you had even approved application - but they chose to rent another place, potentially even paid more.

In most markets, at most times, over 80%, maybe over 90% of all apartments that are vacant will rent. That leaves you with the bottom of the barrel nobody wanted. I have been renting houses for almost 15 years, I have never had a vacancy for more than a month. We have a national housing shortage right now, demand is red hot.

I have seen this many times, especially with out of State investors. Your next move is to check it out in person, odds are you will know why it did not rent the second you open the door.

Fair point. This one is half an hour away. Did check with PM company, their inspectors made multiple trips and no bad feedback from showings. Still might not be telling me the truth.

Alicia MarksPro Member

Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes

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I had pushback and difficulty with finding qualified renters in my area just south of DFW. I definitely feel that more people are feeling the crunch and just can't afford housing. We are seeing a lot of evictions for nonpayment at the lower prices, so a remodeled one sounds great, but they ultimately can't qualify due to income or credit. In order for me to drop it to something that would be affordable to the middle of the pack I'd be looking at several hundred in loss per month.

John Bartlett

Member since 2021 · 62 posts · 46 votes

@Rongsu Qi a property behind my street was on market for probably about 8-12 weeks before it finally rented over in Longwood. It was the first time in our neighborhood I seen a property go for $2400/month for a 3/2 1200 SQ ft sfh. Last one about 8 months ago went for 1800.

David B.

Investor · Worcester County, MA · Member since 2016 · 122 posts · 72 votes

Quote from @Rongsu Qi:

Have a nice little 3/2 on the market for a few weeks, about the lowest price in 5 mile radius. Lots of contacts, 20+ showings, 3 approved applications and yet still not rented. Talked to my leasing coordinator from the PM company on Friday and was told all rentals they manage in the broader Orlando area are at least 2-3 weeks now. Ones in a more remote location are not moving at all. They manage 1000+ properties, mostly blue collar properties I think.

This is very unusual. We should be in the peak season for rentals now and past years we tend to rent higher and faster in the summer than the winter. Also, I just had two other units listed in April and one rented in 3 days (priced below market) the other two weeks (priced higher end of the market).

I'm wondering whether we're seeing the inflection point of the rental market. My guess is people have ran out of pandemic stimulus money and rental assistance, and other savings they may have. With inflation in food and especially gas, they just simply can't afford to move, or maybe even downsizing/downgrading.

Anyone seeing similar trends in your market?

Hi, I also own a SFR in Sanford, which is currently rented. Mine is renovated but still well below median in home value and rent amount. It's a 2/1 1950s house. I'd grade the neighborhood as C+. In early 2021 it took approximately 6 weeks to rent, and the PM had to drop the price $50.

Anyway, maybe you need to look at price.

OP

Rental Property Investor · Orlando, FL · Member since 2017 · 34 posts · 8 votes

Quote from @David B.:

Quote from @Rongsu Qi:

Have a nice little 3/2 on the market for a few weeks, about the lowest price in 5 mile radius. Lots of contacts, 20+ showings, 3 approved applications and yet still not rented. Talked to my leasing coordinator from the PM company on Friday and was told all rentals they manage in the broader Orlando area are at least 2-3 weeks now. Ones in a more remote location are not moving at all. They manage 1000+ properties, mostly blue collar properties I think.

This is very unusual. We should be in the peak season for rentals now and past years we tend to rent higher and faster in the summer than the winter. Also, I just had two other units listed in April and one rented in 3 days (priced below market) the other two weeks (priced higher end of the market).

I'm wondering whether we're seeing the inflection point of the rental market. My guess is people have ran out of pandemic stimulus money and rental assistance, and other savings they may have. With inflation in food and especially gas, they just simply can't afford to move, or maybe even downsizing/downgrading.

Anyone seeing similar trends in your market?

Hi, I also own a SFR in Sanford, which is currently rented. Mine is renovated but still well below median in home value and rent amount. It's a 2/1 1950s house. I'd grade the neighborhood as C+. In early 2021 it took approximately 6 weeks to rent, and the PM had to drop the price $50.

Anyway, maybe you need to look at price.

Thanks. What really baffles me now is three qualified applicants backing out. Not my only house in Sanford and this one had rented in a week back in 2020. Maybe pricing lower will work, still just don’t get why people would apply and then not take it. It costs like $60 to apply after all.

David B.

Investor · Worcester County, MA · Member since 2016 · 122 posts · 72 votes

Quote from @Rongsu Qi:

Have a nice little 3/2 on the market for a few weeks, about the lowest price in 5 mile radius. Lots of contacts, 20+ showings, 3 approved applications and yet still not rented. Talked to my leasing coordinator from the PM company on Friday and was told all rentals they manage in the broader Orlando area are at least 2-3 weeks now. Ones in a more remote location are not moving at all. They manage 1000+ properties, mostly blue collar properties I think.

This is very unusual. We should be in the peak season for rentals now and past years we tend to rent higher and faster in the summer than the winter. Also, I just had two other units listed in April and one rented in 3 days (priced below market) the other two weeks (priced higher end of the market).

I'm wondering whether we're seeing the inflection point of the rental market. My guess is people have ran out of pandemic stimulus money and rental assistance, and other savings they may have. With inflation in food and especially gas, they just simply can't afford to move, or maybe even downsizing/downgrading.

Anyone seeing similar trends in your market?

Hi, I also own a SFR in Sanford, which is currently rented. Mine is renovated but still well below median in home value and rent amount. It's a 2/1 1950s house. I'd grade the neighborhood as C+. In early 2021 it took approximately 6 weeks to rent, and the PM had to drop the price $50.

Anyway, maybe you need to look at price.