New Study Shows 2008 Rents, Occupancy Down

By E-Renter Tenant Screening
Posted on February 4, 2009 under Landlord Tips, Tenant Screening & Background Checks | Be the First to Comment

A just-released study confirms what property managers and landlords already know: rents are down, and so are occupancy rates.

 

The reporting agency, Realfacts, covered nearly 3.2 million rental units in 60 MSAs (Metropolitan Statistical Areas). The study indicates the highest average drop in rents occurred in Florida, California, and Arizona, where declines ranged from 1.6% to 2.4%.

 

Additionally, the national average rent dropped below $1,000 in December, 2008, to $993. And there’s more not-so-good news: occupancy dropped in 2008, ending up at 93% for year’s end. This translates into more than 10,000 vacant apartment units.

 

As expected, the number of units added in 2008’s shaky economy dropped. The study showed that while an average of 65,000 units were added annually over the past ten years, 2008’s increase was only 9,248—a huge decline, reflecting both the tightening of credit and the concerns of nervous investors, who could be waiting for rents to swing back up before taking on new development.

 

Flat or declining rents, coupled with an average 4% increase in expenses, would make any landlord anxious. The good news is that smart landlords and property managers can successfully ride out the downturn, poised to prosper when the economy starts growing again—as it inevitably will.  

 

While it’s more important than ever to tighten up procedures and control cash flow, don’t overlook reducing your risk. Haste can certainly make waste if procedures are pushed aside in order to fill vacancies. Go slowly and be careful—and consider implementing new policies that can increase occupancy and reduce your risk.

 

5 Must-Dos for Every Landlord

 

1. Plan:  Plan for occupancy, not vacancy: As soon as a tenant vacates, be ready to move the next one in.
2. Pre-Screen Tenants: Now is not the time to take on tenants who cannot handle the rent or have a negative renting history. Screen before you offer any rental agreement.
3. Market your property: Present it and sell it as strongly as you can.
4. Keep advertising: But investigate lower-cost advertising methods to save cash.
5. Don’t keep it to yourself: tell friends, family, and co-workers about your property, even when it’s occupied. The more folks know, the more they can help you when it’s time to hang up the “For Rent” sign.

 

Source: Realfacts

  

Next post: Marketing Your Rental Property in a Tough Economy