I'm seeing a huge drop in rental inquiries... are you?

[Amanda Thompson]

Hi all! This fall has been dead! I don't know what to do... we have 6 brand new, gorgeous townhomes we just built. They are in a private community, with grass, a gazebo, stainless steel appliances... needless to say, they're in a desirable location and anybody would love them. WHY have I only received ONE application in the past month?? I'm curious about other markets, but if you're from Boise let me know what is going on. I lowered the rent dramatically compared to our other rentals, and am running a move-in special for $500 off. I posted on Craigslist, Facebook, and purchased an ad package from apartments.com. We even made flyers! The one application I received was from someone totally unqualified, too! We have some other rentals available at this time, but I'm really worried about these new ones. 

[Greg M.]

I'm nowhere near the Boise market, but it's been on my radar.

If what've I've been reading is accurate, Boise is going to be an interesting case study over the next couple years. It is supposedly the most overpriced area in the US based on historical patterns. It sounds like the city is seeing an outflow of residents - mainly those recently arrived residents. Supposedly 3/5 homes on the market have reduced their price since listing and it was the first major market to see a price drop. 

My guess is that all that California cash that was making your market go crazy is drying up. Rents went up super fast as non-locals outbid locals for homes and forced people into renting. Maybe this is the start of the correction as the non-locals flee?

[Tim G.]

How do they compare in price to other rentals in the area? As they say, price fixes everything, if they are comparable priced to lower quality rentals I'm sure folks will start to apply. 

Not only has the selling side of the market slowed down, but renters are also over massive rate increases and unless forced are no longer willing to participate in this bubble.

Side note: Are they listed for rent on Zillow? 

[Michael Plante]

How close are your other rentals?

[Greg R.]

The consumer is fed up w/ the astronomical prices. They are using their strongest and best strategy to fight back - don't buy. A lot of people have shifted to multi-generational living arrangements to fight record high rent prices. 2 (or more) families sharing a home, kids moving back in with parents, etc.  

[Jeff Copeland]

How long have you been managing in your market?

I'm in Florida, so it's certainly not weather-driven, but we always see a noticeable seasonal slowdown in the Fall. Less people are moving during back-to-school season, and then all of a sudden the holidays are looming. 

I'm not saying the other factors mentioned in this thread aren't a factor, just that some seasonal variation is normal. 

[Melanie Thomas]

Quote from @Jeff Copeland:

How long have you been managing in your market?

I'm in Florida, so it's certainly not weather-driven, but we always see a noticeable seasonal slowdown in the Fall. Less people are moving during back-to-school season, and then all of a sudden the holidays are looming. 

I'm not saying the other factors mentioned in this thread aren't a factor, just that some seasonal variation is normal. 

I was coming to say just this. We experience a slow down the closer we get to the holidays every year. Less people wanting to move, travel, hosting family gatherings etc.. Happy investing, good luck!

[Mike Dymski]

People are consolidating households.  Nonhomeowners are getting hit hard by inflation.  Many areas have rent, fuel, utilities, and food costs that are up a lot more than 8% CPI.  18% of US adults in the September UBS survey said they lived rent free with other people during the last six months, up from 11% at the same time one year ago. That was the highest share of adults living rent free with friends and family since UBS began asking the question in 2015.

[Chris Davidson]

@Amanda Thompson one application in a month?!? sounds like your advertisement is off. I didn't see Zillow and I think craigslist died. I've never had good luck from apartments.com but occasionally get a hit, but what is your inquiry rate? Applications are one thing but if you aren't getting anyone reaching out you either have priced too high or the wrong people / no body seeing your ad.

The winter is always slower as people don't like to move in the winter/ holiday season. 

[Amanda Thompson]

They are priced at $2195 for a 3 bedroom/3 bath with 2-car garage, and $1795 for a 2 bedroom/2 bath. This price is very comparable and even on the low end, for the quality of the rentals. Our other newer rentals, for example, are all renting for $2400/mo (3 bedroom w garage) and $2200/mo (3 bedroom, no garage)... and there are 12 of those in the same neighborhood! 

I've never used Zillow, but I will throw up a listing there tonight! Thanks for the suggestion!

Quote from @Tim G.:

How do they compare in price to other rentals in the area? As they say, price fixes everything, if they are comparable priced to lower quality rentals I'm sure folks will start to apply. 

Not only has the selling side of the market slowed down, but renters are also over massive rate increases and unless forced are no longer willing to participate in this bubble.

Side note: Are they listed for rent on Zillow? 

[Amanda Thompson]

Right, and we do have quite the seasonal swing (100 degrees in the summer, 20 degrees in the winter). I know that this is the time of year renting slows down, but I'm surprised we've had almost NOBODY follow up with these! Florida sounds nice right about now. :)

Quote from @Jeff Copeland:

How long have you been managing in your market?

I'm in Florida, so it's certainly not weather-driven, but we always see a noticeable seasonal slowdown in the Fall. Less people are moving during back-to-school season, and then all of a sudden the holidays are looming. 

I'm not saying the other factors mentioned in this thread aren't a factor, just that some seasonal variation is normal. 

[Amanda Thompson]

I've always used apts.com and never had a problem, which is why I branched out. Craigslist was a last-ditch effort, haha! I have never used Zillow though! I will put a listing on there tonight! I have had way fewer inquiries than normal, as well! And very few people following up after the initial inquiry. I responded to someone else with the details, but the rents are on the low end for our area... and I'm really frustrated about the whole ad situation, but that's another story. lol

Quote from @Chris Davidson:

@Amanda Thompson one application in a month?!? sounds like your advertisement is off. I didn't see Zillow and I think craigslist died. I've never had good luck from apartments.com but occasionally get a hit, but what is your inquiry rate? Applications are one thing but if you aren't getting anyone reaching out you either have priced too high or the wrong people / no body seeing your ad.

The winter is always slower as people don't like to move in the winter/ holiday season. 

[Russell Brazil]

Where are you advertising? You didnt mention Zillow where like 90% of renters are looking.

[Jack Seiden]

Quote from @Amanda Thompson:

Hi all! This fall has been dead! I don't know what to do... we have 6 brand new, gorgeous townhomes we just built. They are in a private community, with grass, a gazebo, stainless steel appliances... needless to say, they're in a desirable location and anybody would love them. WHY have I only received ONE application in the past month?? I'm curious about other markets, but if you're from Boise let me know what is going on. I lowered the rent dramatically compared to our other rentals, and am running a move-in special for $500 off. I posted on Craigslist, Facebook, and purchased an ad package from apartments.com. We even made flyers! The one application I received was from someone totally unqualified, too! We have some other rentals available at this time, but I'm really worried about these new ones. 

 Three words, reverse household formation.

[Nathan Gesner]

Quote from @Amanda Thompson:

I would like to know how long you've been managing rentals. Your profile was activated in 2021, so I'm guessing you're fairly new. The last two years have been unusual. The last 12 years have been pretty strong for the rental market with increasing rates every year and some years with double-digit increases. That doesn't last forever.

We're seeing sales slow and prices drop. I suspect we'll see a similar, albeit smaller, decrease in rental activity. It's the typical slow-down for fall (school starts, weather cools, holidays, etc.) and we'll see an even slower market as people struggle with increasing prices due to a tanking economy. The cost of living has increased 9.1% according to the Fed, but they use an antiquated method of analysis so the true increase is probably closer to 20% or more. People are going to start feeling it and tightening their belt.

[Jared Hottle]

Even with the last two years being hotter than ever it is still seasonal at least here in Iowa. I always see a drop off of demand from September till February. That is why I try to get leases to end in the spring. Cannot really time the BRRR finishing up by try to get it as close to a spring/summer lease up as possible. Not sure if Boise would be as seasonal but something to think about.

[Harrison George]

Im out here in the Boise Market, with several properties, and I feel like i got bombarded when i put my home on the market. 

[Amanda Thompson]

Quote from @Harrison George:

Im out here in the Boise Market, with several properties, and I feel like i got bombarded when i put my home on the market. 

 Bombarded, really? Wow, that's not what I'm hearing from realtor friends about our market right now! It was up until last spring, but has been dying down over the summer/fall. You got lucky! Congrats!

[Harrison George]

Quote from @Amanda Thompson:

Quote from @Harrison George:

Im out here in the Boise Market, with several properties, and I feel like i got bombarded when i put my home on the market. 

 Bombarded, really? Wow, that's not what I'm hearing from realtor friends about our market right now! It was up until last spring, but has been dying down over the summer/fall. You got lucky! Congrats!

 I think its because property is near the Village in Meridian! I think since rates are going up, you will see more people pushed out of the "buying" pool and pushed into the "renter" pool! Have you looked into the medium term rentals? 

[Karl B.]

With the broader market slowing down and the US being in a downturn, I think demand for A-class properties will go down in some markets.

I deal in mostly C-class properties and in my market I have not seen a slow-down. 

[Amanda Thompson]

Quote from @Harrison George:

Quote from @Amanda Thompson:

Quote from @Harrison George:

Im out here in the Boise Market, with several properties, and I feel like i got bombarded when i put my home on the market. 

We are now offering shorter terms! Typically we like 12 months, but I don't want to do 12 months and have everyone's lease end in November. haha I'll do a 6 month intro, and then a 12 month renewal I think.

 Bombarded, really? Wow, that's not what I'm hearing from realtor friends about our market right now! It was up until last spring, but has been dying down over the summer/fall. You got lucky! Congrats!

 I think its because property is near the Village in Meridian! I think since rates are going up, you will see more people pushed out of the "buying" pool and pushed into the "renter" pool! Have you looked into the medium term rentals? 

[Eliott Elias]

Is it priced correctly? Zillow is a good way to attract tenants