Right now many [tag-tec]landlords[/tag-tec] across the nation are in "high cotton".
That’s Southern for times are fine and tenants are fighting one another to rent from you.
Another way of putting it is [tag-ice]tenants[/tag-ice] are "as nervous as a long-tailed cat in a room full of rocking chairs."
So, how did all this happen?
The market has shifted in favor of rentals. Fewer people are buying houses. More are renting. That’s a change from the last few years. Since 2002, tenants have been rushing to buy their first homes. That created a glut of rentals at first. As a result more condos were being built instead of apartments. Inevitably, supply and demand kicked in. Fewer apartments + more tenants = very happy landlords.
This also means rents have gone up. According to Property & Portfolio Research Inc., rents have increased an average of 3.7% a month. For a typical 1,000 square foot apartment rent that’s a jump from $1,339 per month to 1,389 per month. On the average.
I know, I know. Your market and your units are not typical. But there’s a strong trend here. Maybe your units haven’t gone up as much but many tenants who were going to buy are now cocooning in rentals instead of their own places.
When tenants in San Francisco are racing each other to see who can fill out applications the fastest, and others in Manhattan’s Upper West Side are offering $100 more per month than the asking price, that’s rip-rousing dramatic.
Next question is how long will it last? Probably not long.
Folks, it never does last long. Market forces are always changing. In fact, they change as fast as a fourteen- year- old cheerleader’s fav lip gloss. (Well, almost).
This is where a lot of real estate investors miss it. During the good times, they’re smart, practically brilliant. Not-so-good times and they feel like a duck stuck in a dry pond.
Get your systems in place for all market conditions. Let me repeat that. Learn from the experts. Find out what they do. Come up with plans that work for you in all markets. So when markets shift and change all you have to do is click a button and you’re good to go. But first you’ve got to click that button in your head.
We’ll talk more about this in future posts because I believe it’s one of the most important reasons many real estate investors do wildly well while others just give up and lose big time.
The point is you’ve got to be ahead of the curve. Be prepared and when the shift comes you’re sitting as pretty as "that possum on the stump". Translation: That’s gooder’n grits.