A Renters Market

As of late, the spotlight has been on the sluggish sales market! But, the slowing sales market has not only affected sale prices. The lack of closed sales has directly put downward pressure on rental rates, in large part due to the fact that a growing number of homeowners who have been trying to sell, with no success, have now been forced to rent their homes. This occurrence has forced many home owners to put their properties on the rental market to help assist with mortgage payments. Consequently, the increase in supply of available rentals has not been met with an equal increase in demand caused from population growth. Therefore, rental rates have continued to steadily decline.

Renters are presently securing lease rates not had in years. For example, one can presently lease a newer 3 bedroom, 2 bath, 2 car garage villa for $1,100 - $1,200 per month; the same villa leased for $1,450 just two years ago, representing a 17% - 24% decline in rental rates. Furthermore, concessions are also present. In some communities, owners competing over qualified tenants have sparked additional concessions. It is also not uncommon for renters to receive incentives including 2-4 weeks free rent, window treatment upgrades, and free social/fitness memberships all paid for by the home-owner.

Many owners have not fully realized the trend and or accepted the new market rental rates. Consequently, this has caused many units to remain vacant on the market for longer periods of time. It is not uncommon for homes to remain on the rental market for 4-6 months. Conversely, in the past, with the booming economy and appreciating real estate values, demand for available rentals was increasing faster then supply and rental rates were typically steady to rising. In addition, concessions were not as prevalent and properties were renting much quicker.

To maximize income and minimize losses owners should consider the advice of local real estate leasing professionals and be aware that rental rates are not a function of the owner’s mortgage payments, but one of supply and demand. This realization should ensure a better outcome in this very different market. Louis Pfaff is a licensed real estate broker, the President of Synergy Real Estate, a local property management company, and has a Masters Degree in Real Estate.

Should you have any questions, please do not hesitate to contact Synergy at 239-403-0030.

For more info about Fort Myers Property Management please visit the link http://www.naplespropertymanagement.net/