Rental demand up dramatically

21 Replies

In our neck of the woods (Metro Atlanta) rental demand is through the roof. We have a waiting list and cannot answer the phone fast enough. Upward pressures on rents have enabled us to send out "rental increase" letters for the first time in several years. On the multifamily we are finally able to pass the water bills off to the tenants. Truly amazing.

We are also experiencing a higher rate of turnover. Tenants that have buckled down with us through the recession are buying houses or moving closer to their new jobs. These are the tenants that leave the home in a "clean and ready to rent condition normal wear and tear excepted" as specified under GA Law. Once again a rarity.

How are things looking in your area? Thoughts?

I too am experiencing an incredibly high demand. I'm in Cleveland Ohio 1 craigslist add easily generates 25 calls a day.

@John C. Where in Atlanta are your properties located. I had two last month in Decatur and East Atlanta that were rented before the old tenants left and one this month that was rented just today so only a few days rent lost on that one.

I had a prospective tenant (we are now calling them residents) that said he didn't want to put down an application fee because if there are others in line he wouldn't get it. Good to hear. Also, the 2 in Decatur are near some hedge funds properties and I no longer afraid of them. I've seen what they've done and I have a feeling some of those will be on the market in a couple of years. Most, not all of them, are painted pigs.

our rents have increased 10-20% with lots of demand. Rehoused are renting before the old tenant even leaves! Great time to be. Landlord and I think it's only going to get better. In our areas there is always need for rentals. The demand is the same if not higher (prices are getting higher) but rentals are decreasing! Reluctant landlords are finally able to sell ! Those who bought in the crash are selling at higher prices not keeping the house. Therefore this lack of supply is pushing the prices way up !

Boston (where I live): the market is insanely hot. Realtors are charging full month fees and passing it along to the tenants. Rents are jumping up, demand continues to rise despite many of the major universities building high rise dorms.

Rutland, VT (where I own): meh. Same rents, takes about 25 calls and a month to fill vacancies. Love them once they are in, but it is a strange group of potential clients.

Here in East Tennessee (Knoxville area), it is not as good. I have two that I have ads on Postlets ( which syndicate to multiple sites) and have yard signs out and I'm lucky if I get a call every other day. The asking rents are what I have been charging for three years now and are in line with comps. I am starting to wonder what is going on here. I may have to break down and try craigslist again and hope my ad doesn't get scammed. I'm glad you all are doing so well. Send some my way!

Indianapolis is doing pretty well. Early this year one of my places rented in 3 days. Another took 1.5 months -- however, 1 month of this time was due to the insane weather Indy was hit with.

Richard, I can't agree more! Indianapolis market is booming! Great opportunities for investors.

Great observation.

Indianapolis has been strong for several years and seems to be getting better all the time. With high rental amounts, strong rental demand and low prices [these are creeping up though] Indy is a hot market to be in. I'm glad I live here!

To help cut down on tenant turnover, I've switched most of my SFH over to lease option. This gives me a 3 year lease, virtually no maintenence or calls from the tenant/buyer plus full or above market rent. Then of course, the perk of selling at full price [if they ever execise their option to purchase - which is only about 10% of the time].

Here in SE Nebraska demand is great. We have a waiting list and just raised everyone's rent almost 20% (granted, the previous owner had not raised rents in a long time). Even with that jump, we are on the low end of the market. Wish I had some dry powder to buy some more doors...

@John C. Thats awesome to hear John. Here in Rhode Island the pickings are slim lately. Seems like there aren't many quality renters out there. Rent prices are below average. We have experiences charging tenants for additional items such as lock outs, parking fees, etc. and we rarely collect. It is great to hear they are paying water bills! Good luck!

@Shawn Holsapple can you share with me your lease option terms? I might be interested to do the same thing with some of my rentals.

Milwaukee extremely high demand for quality rentals.

Especially for 4 to 5 bedrooms

More tenants looking then quality house for rent.

Indiana / Ohio might be booming but could you say

every other week opportunities for 2% rental ?

Warren Buffet predicted this as well as others. The demand for rentals is going through the roof everywhere population increases. In LA, rents have nearly doubled in most areas just in the past few years. There seems to be no end in site as populations increase and building can't keep up. In one area I invest in they have not built a single new house in years yet thousands have moved in. With that math landlords are getting double digit % raises annually. Buy and hold til the tide changes which could be 20 to 30 years according to the Buffet types.



Originally posted by @Yang Xiao :
@Shawn Holsapple can you share with me your lease option terms? I might be interested to do the same thing with some of my rentals.

email sent with details

@Shawn Holsapple would you share your terms with me also!! (as the whole crowd jumps in) lol

I've honestly thought about doing this with some of my better long-term renters and essentially just amortizing the terms to where they own the home in 15 years. Especially if they have been no headache. One it cuts down like you said on what I have to deal with and two they get the incentive that they'll be a home owner at some point.

Has anyone done this?? My idea would be to amortize a loan based off the rent they are paying currently and doing a lease option to where at the end of 3 years(the max a lease can be without recording in Indiana) I would just renew with them at where they are based on the amortization table and do that every 3 years.

What do you charge for your lease option fee? I can't see 90% walking away if they are putting 5% or more down.

@Adam Gerig:

I've followed the following guidelines so far:

Under 100k = 3k down + 1st month + Deposit

100-150k = 5k down + 1st mondth + Deposit

150k+ = 10k+ to whatever you can get and feel comfortable with.

I've heard there bay be many regulatory issues you may need to be aware of if you give the tenant buyer any sort of monthly credit or amortization. What I've seen done is to offer them a discount if they can cash you out by a certain date. You can rewrite if they don't exercise. In Georgia it is much more expensive and time consuming to foreclose instead of evict so they need to have some serious skin in the game (at least 10%) before I will give them owner financing.

FYI I just had a tenant buyer walk away from her 5k option fee. She was making 80k/year in Atlanta but was offered a job in California for 180k/year. Some would argue that was a paycut but whatever. :-)

Hi @John C.

Metro Atlanta is hot as you mentioned. I just need to put one ad via postlets and I get multiple calls a day (15 minimum). My MF is 100% occupied I could very well have a waiting list for the same. I can get $1200 for a 3bed 2Bath (30312) and $1350-$1400 for a 4Bed-3bath in (30315). Are the rental rates close to what you are experiencing?

Good post btw. Enjoyed reading

My Area ( Cobb County) is really good. I just rented a 3/2 1954 ranch home for $975. I put some bandit sings one week prior to finishing the renovation and 3 days prior to completing the renovation I had a singed contract with an excellent profile tenant. ($400 NOI per month).

if I could get my hands on more cash I will do this deals all day long...

Clayton county (GA)30296 is doing great too. 2 properties, listed one week, 48 showings & both leased for $985; full asking price.

Metro Denver rents are up right around 8% year over year. Vacancy rates are climbing slightly 4.6% to 5.1% year over year. Huge amounts of inventory coming online. Rent growth is expected to level off and the vacancy rate increase. I've not had any problems filling my units yet with healthy rent increases (5-10%). Looking for longer term leases but with entry level units there are not a lot of takers.

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