Time for a "Rental Renaissance" ?

I loved the title of this UK blog article:  Home Buying Has Peaked:  Is it Time for a Rental Renaissance?
In it, the author examines the perspectives of the "new generation" of renters, in particular those of the "sell to rent" group.  Although there are some differences in the location-specific forces that influence housing market, I agree with the author that there is a new "breed" of renter, and a growing opportunity for those involved in the rental market, if they can innovate and embrace.

The housing crisis has produced a renewed interest in renting, for some by choice and for others by necessity.  And, the impending U.S. mortgage reset schedules will force even more former homeowners into the rental market (PropertyManager.com - Rental Housing and Real Estate Marketing Trends for 2010). However, at present, there is still a high vacancy rate in some areas, particularly in the apartment market (Rising Apartment Vacancy Rates Could Threaten Regional Banks).

          What's driving the vacancy rates? Several things:

    * As long-term unemployment continues, people are moving in with families and friends;
    * Younger workers are living with their parents while they look for jobs;
    * Older buildings face heavy competition from new construction, which includes both new rental apartments and condo units that did not sell and were converted to rentals. In fact, Reis found that 120,000 new units came onto the market in 2009, the largest number since 2003.

So, given the current statistics, is it time for a "Rental Renaissance?" According to Dictionary.com, renaissance is "a renewal of life; vigor; interest; rebirth."  How can the rental market be transformed in order to embrace the needs of the growing number of "sell to rent" prospects? By adopting and enacting the traits of an "Ideal Renaissance Man":

1.  Confidence
2.  Optimism
3.  Knowledge
4.  Diligence
5.  Motivation
6.  Talent / Skill
7.  Ingenuity
8.  Strength / Determination
9.  Financial Honor
10. Charity

By embracing these characteristics, and by finding ways to differentiate your rental property(ies) and the quality of property management service you offer, you will attract the discerning "sell to rent" tenants.  You can be a "light" to those who have been stressed by the housing crisis, offering an attractive housing solution.

Let's Talk.  What are you doing to differentiate yourself in the current market and to prepare for the coming flood of renters?  How can you make it more attractive to rent from you, rather than choose to live with friends or family?

If you want to trade ideas with other "rental renaissance" thinkers, join the free Let's Talk Property Management community and network with over 400 (and growing) rental property owners and/or managers of single family homes, condos, townhomes, and multi-family properties.

Update on Tuesday, February 2, 2010 at 7:42PM by Dee

Chris Hogan, Attorney at Law, and member of the Let's Talk Property Management community, posted a thoughful response to this article.  In it, he posed several valid questions: 

   So, we should expect a significant increase in the    tenant pool, but is that a good thing for managers of multi-family properties?  I'm not so sure.  On the one hand, more tenants should eventually equal more demand, which is a good thing.  On the other hand, won't many of the "sell to rent" group look for residential to rent first?  Furthermore, won't there by credit issues?

I see the point and agree that many of the "Sell to Rent" group may prefer a residential rental home over a multi-family property. However I believe there is another trend emerging that may favor the multifamily industry.  The "Innocent Evictee," the tenant who has been evicted from a rental unit due to owner foreclosure.  This emerging breed of tenant is predisposed to distrust the financial status of residential rental home owners, and may prefer the perceived security in renting from a larger, more stable multi family property.  There may also be fewer credit issues with the "Innocent Evictee" renter. 

Let's Talk, Residential and Multi-Family Property Managers. What trends do you see and how are you "shifting with the times" to keep quality tenants in your properties?

In his response, Chris Hogan goes on to identify additional questions about how to leverage screening and marketing to identify the best of the "Sell to Rent" group.  Read the full article (Is a Rental Renaissance Coming?) and respond to his questions at SouthJerseyCommercialRealEstateToday.com.



Comments

[Patrick]

Hi Dee,

I found your blog and your Twitter page and it looks as if you are very passionate about combining real estate and technology.

Forgive me for commenting on your blog like this, as I would have emailed you but could not find your email address.

I am a founder of TenantCast, a web-based broadcast and notification tool for PMs, FMs and HOAs. TenantCast allows you to send reminders/notifications to tenants/residents via SMS, fax, recorded telephone broadcasts, email and social networks from one web-based tool. We are in the midst of development and looking for input in how we can better shape TenantCast.

To that end, we have a quick survey up on our website: http://www.tenantcast.com/survey Anyone who completes the survey will be notified of our public beta and will receive a 50% discount code for six months.

We'd love it if you let your blog readers about the survey and discount code or if you tweeted it about it. (Here is a link you can tweet: http://ow.ly/Z4Wr).

Again, I know this blog comment is not the ideal method of communication and I emphatically do NOT want to spam you or your readers.

Should you have any questions, please feel free to contact me.

Thanks,
Patrick