Are landlords really having to drop rents.

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Are landlords really having to drop rents.

Bradley G Fagg
Real Estate Agent · Vineyard, UT · Member since 2020 · 14 posts · 1 vote

I read an Article and it kind of made me think twice about buying a rental property anytime soon. Since I'm new to the game and live in a place called Utah where we live in a bubble that has a 55K unit housing shortage. We haven't really seen rents go down or any of the houses  lasting on the market more than a few days. Is there really going to be a drop in the rental market going on?

https://www.msn.com/en-us/mone...

Thank you 

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Kyle J.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
5y

@Bradley G Fagg Agree with the others. Real estate is very regional.

I don’t think you can take what’s going on in San Francisco or Silicon Valley (two places mentioned in that article), and make any sort of accurate comparison with what’s going on in Utah.

I live a short drive from both San Francisco and Silicon Valley, but outside the Bay Area. And I’m seeing the exact opposite of what’s mentioned in that article. (I’m actually RAISING rents.) 

Point is, you have to know your local market and you definitely can’t base your decisions on what’s going on in some other market/state. 

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  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    MSN equals = fake news

    No that article isn’t based on reality

    1Reply
  • Michael HaasBusiness Member
    Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
    5y

    Seattle is pretty stable. The only rents I've seen decreasing are in the downtown core for large apartment complexes and condo's - in all the neighborhoods outside of downtown rents remain steady or increase. Home prices are up around 10% YoY here in Seattle and projected to increase another 6-10% in 2021. There continue to be massive net-inflows of residents to the city and suburbs.

    All rentals I've listed since Covid have had multiple applicants. I've never seen so many people lining up to invest in the Greater Seattle Metro. I think a downturn will come at some point, but there's a lot of momentum pushing rents and prices higher right now. 

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    9Reply
  • Sherief Elbassuoni
    Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
    5y

    @Dan Worontzoff, I agree with what @Michael Haas mentioned above. Aside from the Central Business District (CBD) area, rentals are pretty stable. Even when someone got impacted by Covid, we connected them with assistance programs to keep getting the rent.

    We were just discussing this topic here in this thread. Feel free to get a look:

    https://www.biggerpockets.com/...

    3Reply
  • Marisa Alvarez
    Rental Property Investor · Clearwater, FL · Member since 2015 · 112 posts · 29 votes
    5y

    @Todd Groom lets connect ! I am an investor in the Clearwater Area and I do Section 8

    0Reply
  • Gary L Wallman
    Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    5y

    Rents in my area (SW Ohio) are on a tear. Vacancies are extremely low and rents have risen by 25% over the past 3 years.

    1Reply
  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    5y

    Personally, I've been raising rents here in Toledo for every vacant unit I've had and there has still been a ton of interest. The rental market here is very strong overall, but we are not a destination city, just a good ol' Midwestern city. 

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    1Reply
  • Randall Pike
    Wholesaler · Grand Forks, ND · Member since 2015 · 3 posts · 1 vote
    5y

    It's all location and what industries you have in the area. Grand Forks, ND is stable after taking a hit two years ago due to overbuilding apartments and condos. Covid has had minimal effect due to a large University population. Students still need a place to live even if they attend classes via computer. Some trade businesses have closed but others have taken their places. More restraunts have closed than usual, but that doesn't seem to effect the need to live locally and rent an apartment. More people are grouping together in multi-family dwellings. 4 BR Duplex are holding steady.

    0Reply
  • Stephen Brown
    Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    5y

    I just raised rents $250 in my market here outside of Toledo... All I did was add new floors hahaha.

    0Reply
  • Sean Todd
    Rental Property Investor · Phoenix, AZ · Member since 2019 · 16 posts · 5 votes
    5y

    We raised rents on 3 our properties in Arizona (2 in Surprise and 1 in Peoria) an average of 12.35%.  All 3 were lease renewals.  Also, leased up a new build that we just acquired for over $250 more than I projected when running initial comps.

    0Reply
  • Haseeb M.
    Real Estate Agent · Hoffman Estates, IL · Member since 2017 · 90 posts · 68 votes
    5y

    Our rents are going up in the suburbs of Chicago, 10-15% on average.

    0Reply
  • James Kojo
    Rental Property Investor · Scottsdale, AZ · Member since 2016 · 184 posts · 223 votes
    5y

    @Dan Worontzoff: I own 250+ units in A, B and C class properties, SFH and MFR, in CA, TX, and OH. I also invest passively in AZ, FL, GA, TX and NC.

    We have seen steady rental increases across the board throughout the pandemic. The few assets that I've seen any kind of distress at all have been c-class assets in tertiary markets, and even then it hasn't been that bad.

    I know that San Francisco and NYC have been hit, but they seem to be the exception, as they were already hyper inflated, and they lost some of their value proposition during the pandemic.

    Hope that helps

    0Reply
  • Ryan Pyle
    Multifamily Investor · Toledo, OH · Member since 2008 · 296 posts · 308 votes
    5y

    I've been raising rents here in Toledo. Flyover country is doing just fine.

    0Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    5y

    This is going to be very location specific, but also it will depend on which part of the rental market you service. Almost all of my rents are between $700-1300 per month. I am generally feeling that rents are stable here in the Berwyn and Cicero area outside of Chicago. I am sure the A class down town apartments are hurting, but more affordable housing seems to be unaffected. 

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Dan Worontzoff:

    @Bradley G Fagg

    NYC rents have tanked. With no entertainment there is a lot of vacancy. For studios and 1br that’s I’ve looked at - maybe a 20 percent decrease in rent, some with broker fees waived or a month free.

    Rents in downtown Chicago high rises are being squeezed. I don't know if it's a 20% decrease but management companies and landlords are providing incentives that didn't exist one year ago.

    312-681-7487
    0Reply
  • Brianne Leichliter
    Rental Property Investor · Cincinnati, OH · Member since 2019 · 59 posts · 77 votes
    5y

    @Bradley G Fagg I agree that this is entirely by location.  I'm not seeing the need in Cincinnati to drop rents.

    There are still plenty of working/paying tenants looking for a nice place to live.  I raised rents from $350-$650 and did an eviction in the middle of the CDC moratorium.

    1Reply
  • Mike HurneyPro Member
    Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
    5y

    @Bradley G Fagg

    Almost a year ago 3/20 I had new Leases with 2-3% increases, then the covid hit and I thought I'd wait a month or two;-)

    So now I'm renewing leases with those increases... Mike (Boston & North)

    0Reply
  • Tom O'Stasik
    Real Estate Agent · Tulsa, OK · Member since 2019 · 130 posts · 66 votes
    5y

    A friend in Chicago has had to drop his rents in two units. I haven't had this issue in Tulsa

    1Reply
  • Clay O.
    Investor · Tulsa, OK · Member since 2017 · 102 posts · 88 votes
    5y

    My daughter lives in San Francisco and rents are dropping there. Some places are giving free months and free parking. 

    1Reply
  • Misti DelMar
    Member since 2021 · 63 posts · 37 votes
    5y

    May be unrelated to most of you, but interesting on this topic... I currently live in a popular tourist city in Mexico (w/ a lot of American investments). My upscale condominium is owned by a large hotel chain, and they have given us 50% off rent since last March. Can't complain as I'm currently the renter, haha.

    1Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    5y

    I'm not seeing rents dropping in Philadelphia but they do seem to be flattening out.

    4Reply
  • Gayle Eisner
    Investor · Monterey, CA · Member since 2014 · 177 posts · 55 votes
    5y

    Rents dropping San Jose, CA as well. Ouch!

    0Reply
  • Matt Higgins
    Property Manager · Blaine · Member since 2015 · 209 posts · 276 votes
    5y

    Rents going lower and vacancy up in Minneapolis.  

    0Reply
  • Tracy Morris
    Real Estate Agent · Peoria, IL · Member since 2019 · 25 posts · 29 votes
    5y

    I'm an investor and realtor in the Greater Peoria (IL) area. I've seen rents stay steady and even increase in some areas. In our brokerage alone, we've seen people coming from out of state to get the affordable cost of living, and I've had a huge uptick of out-of-state investors buying homes in the Greater Peoria Area that have great ROI's. Our property management team is turning away possible tenants for certain areas because we have no vacancies - they're being rented out crazy fast!

    0Reply
  • Michael S.
    Investor · Member since 2020 · 31 posts · 18 votes
    5y

    Still seeing normal 2-5% increases in tier 3/4 cities like Rochester, NY / Huntsville, AL / Charlottesville, VA. Tier 2 is prob tough for new investments right now with rent dropping and purchase price increases (i.e. Boston)

    2Reply
  • Evan Parker
    Investor · Atlanta, GA · Member since 2017 · 184 posts · 204 votes
    5y

    My advice would be to still buy, just buy smart. In the market I'm in, Atlanta, there is no shortage of people needing a place to stay. Given the times we're in does it mean that rates won't INCREASE as much as they would've otherwise? Maybe. But a decrease is not really likely so long as you're in anything close to a major city or suburb area. 

    I can only imagine there is a decline in rental rates in a area where there is a decline in a general desire to live. 

    1Reply
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