The good people over at Rent.com have just put out their latest Property Owner and Manager Report. The findings this year all point to one interesting trend: landlords now have the distinct advantage in the rental game, and they intend to capitalize on it. The report is based on information drawn from thousands of properties and hundreds of thousands of rental units. Here’s what else the report has to say:
Renters are Staying Put
According to the property managers surveyed, nearly 35% percent reported that renters are holding onto their apartments and renewing their leases rather than moving on or buying; that figure represents a 5% jump over 2014. Vacancy rates have not been this low in the last 20 years, and the upside for property managers is having to expend less resources in order to fill apartment openings. Fifty-five percent of property managers said they’d be less likely than in years past to offer concessions to apartment seekers, with 64% reporting they are not doing anything different from what they were doing a year ago.
Charging More to Rent
A vast majority of property managers – some 88% – say they raised their rents in the last 12 months, and a healthy 68% predicted their rental rates would continue to rise into 2016 by an average of eight percent, two percentage points more than was predicted in last year’s report. That may not seem like a lot, until you factor in that most employees can expect a wage increase of 2.7 for the same time period.
Renter Profile
The much discussed millennial generation (those aged 18 to 34), with limited job prospects, high student loans, and lower incomes are finding it easier to rent than own. Forty-five percent of property managers say they’ve noticed an uptick in the number of renters from this group and speculate many of them are just now moving from their parents’ homes into the rental market.
Former homeowners are also entering the rental market at a higher pace, with fifty-four percent of all property managers reporting an increase in their numbers. That represents a four percent increase over last year’s trend.
Fifty-six percent of respondents say that the increase in demand for units has not made them more selective in their choice of renters, and only 17% said they’ve become more selective. Top requirements for renter approval remain high credit scores, a higher income-to-rent ratio, and an excellent rental history.
Paying for the Privilege
About 43% of property managers say they’ve seen an increase in the number of applicants who do not meet their property’s minimum income requirements. They also report that renters are spending more than the recommended 30% of their wages on rent and need assistance in qualifying for a lease.
We’d love to hear how accurately this year’s report reflects your own rental experience!
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San Diego’s Premier Property Management Company
Local: (858) 273-8800
