Residential Rental Market Trend Update

Residential vacancy rates continue to be the lowest in years.  Heading into the second quarter of 2013 the vacancy rate at CPM is 2.29%.  The Southern Oregon Rental Owners Association is reporting a slightly higher rate of 2.90% and the National Association of Realtors (NAR) is forecasting nationwide vacancy rates below 3.9% by the end of the year in multi-family housing.  According to the NAR Portland, Oregon currently has one of the lowest vacancy rates at 2.1%!

Low vacancy is great for rental owners and may provide opportunity to increase rental rates.  The Property Managers at CPM closely monitor rental market trends and can provide market data to help determine if a rate increase makes sense for your investment.  Some factors to consider when evaluating an increase:

• Location – Is the home located in an area where home and rental values are increasing?  If the value of the
  surrounding homes is headed upward it’s much more likely that a rental increase would be tolerated than if a home is located in an area where values are going down.

• Time of Year – Many families with children are much less likely to move if it is in the middle of the school year. It is generally recommended to increase rents at an occupied property in the fall.
  School is underway, the holidays are quickly approaching and colder weather is just around the corner.

• Type of Rental Property – Apartment complexes and multi-family housing can often tolerate temporary spikes in vacancy if increased rents prompt people to move.  There are other rents coming in to cushion the vacancy whereas, an owner of 1 or 2 single family homes is dependent on a limited source of rental income. However, single-family homes are often much more in demand, therefore justifying higher rents.  Discussing market demand with your Property Manager helps determine whether or not a rental rate increase is practical.

• Condition of the Home – If a home is well maintained it’s more realistic that higher rents can be obtained.  Properties with deferred maintenance items do not warrant increased rents and often result in extended vacancy.  Regular maintenance and practical improvements are logical steps to increased home value and rental rates.

• Your Property Manager can provide tips to improving the value and appeal of your rental property. Taking pro-active steps to positively impact the bottom-line value of your rental property is always a prudent strategy.

Increased occupancy and higher rents make property improvements more practical now than in years past.  Invest now to increase value later.  Impact improvements include parking lot repair/reseal, exterior paint, and landscape design.  As your property management company we will work with vendors to ensure you get the most for your money.  We will obtain multiple estimates, coordinate projects and inspect the end result.

Now is a great time to meet with your Property Manager to discuss the rental market, property improvements and upgrades – just give us a call, 541-773-6400.