Rental Market Attracting Residents Despite Price Increases
The rental market appears to be doing more than just sustaining its health. After surveying property managers, TransUnionfound that increasing prices aren’t keeping tenants away.
Overall, managers reported they are doing better than the year before and are having an easier time attracting in residents despite the increase in prices.
The credit bureau’s June survey included 1,248 property managers across the U.S. who represented a range of property sizes.
Almost half (48 percent) of the managers surveyed reported rental price increases on the majority of their units since last year in June.
Approximately 44 percent said rental prices remained the same. In TransUnion’s 2011 rental survey, 39 percent of respondents stated that prices increased while 48 percent said prices were the unchanged.
For large properties (more than 200 units), 70 percent of managers reported price increases this year compared to 64 percent last year. Among small property (200 units or less) managers, 46 percent reported price increase from last year, an improvement from 36 percent last year.
“Data throughout the last year has pointed to a healthier rental market, and our survey helps validate the current strength of the rental industry,” said Steve Roe, VP of TransUnion Rental Screening Solutions. “The rise in rental prices, coupled with a decrease in vacancy rates and the ability to attract new residents with less effort are all positive signs for the market and rental property managers.”
Even with rental prices increasing, property managers are having an easier time with finding tenants. Nearly 73 percent of managers said finding residents is not difficult compared to 67 percent last year.
The percent of respondents stating vacancy rates for their properties are between 0 percent and 5 percent increased to 83 percent this year from 81 percent in 2011. When dividing up respondents based on property size, large property managers saw an increase to 64 percent his year compared to 60 percent last year.
In addition, 70 percent of small property managers said their vacancy rates are at 0 percent, which is an increased from 66 percent in 2011.
Even with a healthier rental market, property managers still face the issues with finding quality residents.
Nearly 60 percent of respondents said they are concerned or very concerned with finding reliable tenants.
“Though this number is down from 65% in last year’s survey, it does point to the continued unease about the economy and a lingering question about the ability of tenants to make timely rental payments,” said Roe.
More than half of the respondents (53 percent) said they have had a renter leave the unit with unpaid rent or damages, and about 18 percent said a tenant has done so in the last year.
“Finding reliable tenants is critical as property managers can lose thousands of dollars in rent if a tenant skips out of a rental unit, or if the property manager must take action to evict someone from a unit,” said Roe.
The survey included 1,107 small property managers and 141 large property managers.
TransUnion offers two rental screening services to screen residents: CreditRetriever, which is for large property management companies and SmartMove, which targets small and independent property managers.
By: Ester Cho