Keeping Up With Renting Trends
Market Trends can have a large effect on the revenue of any property owner. If demand for rentals is down that could mean valuable units are left empty for months driving down rental prices. Furthermore, a rise in inflation that is not matched with a similar rise is rental price could mean a loss in your bottom line as your management costs rise.
So far this year Rental Property Owners have been seeing positive trends in the market. According to Dr. Lawrence Yun’s (Chief Economist and Senior Vice President for the National Association of Realtors) April 3rd 2014 blog post , Rents are rising although not at the accelerated rate that they have been in the past (currently at 3 percent). In addition, apartment vacancies are declining rapidly and fell .4 percent over the last year to its lowest rate in 10 years. Dr. Yun, makes a good point in his post that rent is likely to grow by at least 3 percent while wage growth probably will only rise 2 percent which means that renters will need to cut spending or move to cheaper apartments as the value of their wages decreases.
According the Daily News (August 14, 2014) it seems the Manhattans rental markets are beginning to feel the pain as New Yorkers head to Brooklyn and Queens for rental deals. This trend revels how cyclical local rental markets can be. There is little doubt that this trend towards the outer boughs will drive down Manhattan rental prices and drive up Queens and Brooklyn rental prices until the market reaches some sort of equilibrium. So what does this all mean for the average rental property manager?
While Rental Property Managers should still see demand for rental apartments throughout the country rising, they need to begin planning for a slowdown. If you own rental property in a high rent area like Manhattan you may begin to see empty units and we need to cut down on your costs to reflect the loss in revenue. If you own property in lower rent areas and are seeing a boost in rentals you need to make sure your saving money and keeping costs down to get ready for the eventual reality that the rental markets in your area may slow down as price rises. One fast way to save money is to make sure you are using the best commercial property management software that saves you both money and time. RISSoft’s software for property management will save you money because it is a Property management system that has features created by a rental property manager for rental property managers and is competitively priced. To see a full list of features please see our features page as rissoft.com