SFR Owners: How is it going?

[AroundTheWorld]

I'm curious about how things have changed for you in the last year.

Rent rates up? down?
Application fees up? down?
Vacancies? Longer? Shorter?

I don't know if our PM charges application fees, but I do know that we are seeing our rental rates go down.

Example: In one of our SFR's (Montana) - One year ago, we rented it for $2200 a month. It went vacant a couple of months ago. We have been dropping the price and dropping it some more... we are down to 1500.


I'm curious...

What are your average rents today?
What are your average application fees today?
Has it changed in the last year?

 

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[hakrjak]

Re: SFR Owners: Have your rates changed?

Interest rates are down on all my ARMs, and the HELOCs are benefitting the most.

Rental rates have not changes at all for me, and niether have rents... But if there is a slowdown or an upturn -- I'm always insulated by being in Colorado Springs where a large number of the renters are government / military employees.

Now that UCCS is taking off, we seem to have a higher amount of student renters than we've had in years past also.

Cheers,

- Hakrjak

 

[AroundTheWorld]

Re: SFR Owners: Have your rates changed?

do you charge an application fee? how much?

 

[kidgas]

Re: SFR Owners: Have your rates changed?

I don't charge an application fee. I increased the rents on half of my rentals when they came available this summer by about 3% from 950 to 975. This is for a 3Br/2Ba (1200 sq ft) with 2 car attached garage in a neighborhood. A comparable apartment in the same town but slightly smaller with no garage runs 900 to 940/month.

 

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[EasyMoney_in_NC]

Re: SFR Owners: Have your rates changed?

Well this is a crappy time of year for trying to rent but thus far, I'm not happy with the current feel of the market. I have 2 vacant that normally would have been gone immediately. I reduced them both by $50 and still nothing. Now I'm below current market rents. Guess we'll see what happens after the 1st of the year. I've started looking into selling them just as a hedge. If the market craps out, I'm not interested in renting to trash for the sake of filling a vacancy. I can sell them at give away money and still make out well, so I may go that way....not sure yet.

Thought for sure this whole foreclosure thing would drive people to rent, but it seems with so much uncertainty, it almost feels as if people are staying where they are until the smoke clears.......? Can't think of anything else major that would keep the phones from ringing with quality people.

 

[Bilgefisher]

My properties are renting for $900-$1200/mo with 1500sq ft or less in lower then average neighborhoods.

As far as rent changes, nothing to note yet. I don't have trend data. With only 2% vacancy in Denver right now its hard to tell. Thankfully for me Denver hit the housing recession almost a year and a half before the rest of the nation. If home mortgages ease up (actually lending, not just interest rates) I'll be curious to see where we are headed.

 

[tbsells]

I'm struggling in everthing related to SFR. Can't sell much of anything. Quality of rental applications stinks. Good long term tenants are starting to fall behind. I've been in this business since graduating college in 1990 and have never seen things this tough. Job security (or lack thereof) is a big problem in southern Ohio. DHL is leaving the area and the consequences will be devastating. It has been reported that the local area is losing 60% of its employment base when its all said and done. I'm kind of in shock. Everything I do is related to housing. I'm not sure what to do when 10,000 families are out of work. Many, if not most, will be leaving the area. Foreclosures in the area are already placing downward pressure on market value. Its going to get alot worse.

I have to get out of this negative frame of mind. Its not helping. I'm just facing adversity of this kind for the first time in my life. I always been one of those people that had it all figured out. Things changed quickly and severely. I feel like I've been slow to react. Its time to kick myself in the a$$ and try something new.

 

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[hatterasguy]

Re: SFR Owners: Have your rates changed?

Thought for sure this whole foreclosure thing would drive people to rent, but it seems with so much uncertainty, it almost feels as if people are staying where they are until the smoke clears.......? Can't think of anything else major that would keep the phones from ringing with quality people.

The only thing I can figure is that they are moving in with other people. Rental inventory is building up in my city as well.

 

[EasyMoney_in_NC]

I'm struggling in everthing related to SFR. Can't sell much of anything. Quality of rental applications stinks. Good long term tenants are starting to fall behind. I've been in this business since graduating college in 1990 and have never seen things this tough. Job security (or lack thereof) is a big problem in southern Ohio. DHL is leaving the area and the consequences will be devastating. It has been reported that the local area is losing 60% of its employment base when its all said and done. I'm kind of in shock. Everything I do is related to housing. I'm not sure what to do when 10,000 families are out of work. Many, if not most, will be leaving the area. Foreclosures in the area are already placing downward pressure on market value. Its going to get alot worse.

I have to get out of this negative frame of mind. Its not helping. I'm just facing adversity of this kind for the first time in my life. I always been one of those people that had it all figured out. Things changed quickly and severely. I feel like I've been slow to react. Its time to kick myself in the a$$ and try something new.

Stop it! Get out of my head! issed:
My area isn't as bad, but I've not had to deal with vacancies and deadbeats etc before either (hence the screen name). Everything I do centers around housing as well, and after 12 years of this, we are certainly in for something new I believe :tdown:

GL with things

 

[andviv]

no fees

had to reduced deposit to half a month's rent, instead of one full month.

and lower rents:
from $950 to $750 in one case;
from $850 to $700 on another, but that one is still empty, so I think another $50 will come off

The area was heavily dependent in the construction industry, so I'm being greatly affected.

 

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[hakrjak]

Re: SFR Owners: Have your rates changed?

do you charge an application fee? how much?

My PM always has. I believe it's $30 -- just enough to cover the cost of the background check. Why is this significant? Nobody makes money off of the application fees do they? LOL... If I could I'd eliminate it just to get more apps, but I know we have to cover our costs atleast.

- Hakrjak

 

[TaxGuy]

there's no problem with charging an app fee, at least you know that the applicants are serious and it's a question of quality over quantity :smxB:

i never charged an app fee, but did make my current roommate pay for his own background check prior to move-in after sorting through 3 quality candidates vs. last time when I got burned by paying for background checks on a few losers including one that ended up being a registered sex offender :smxEsomething I could've found out for free...)

speaking of that, is there a thread that discusses what you guys use for background checks? or do most just go through a PM?

 

[rcardin]

So far so good. Both properties are filled although I am waiting on a late money order from my owner financed house. She usually falls a couple of weeks behind this time of year. As a matter of fact I am going to check the mail box in a few minutes if no check she gets a letter canceling her owner financing and reverting her to a rental status. Then she gets the 3 day notice to pay or vacate. Nice Christmas present huh?

She always comes through when I put the notice to her. Funny how they can find money if they really have to.

If it does actually go empty I will probably be screwed until March when the rentals pick up again. Bad time of the year to be sitting on an open rental.

 

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[rcardin]

Mail Finally came and the check was in it. I'll post a new thread on what would you do.

 

[hakrjak]

One of my renters is paying late this month, but she pays late like 50% of the year. haha... It's like an automatic rent increase for me with the late penalty I guess, so no biggy. She must not be a good money manager because she's lived in my place for 4 years now and she's been late every Christmas since day 1. It's a good thing I don't "Need" the money immediately, otherwise I'd be pissed -- but being in a strong position makes it no big deal and actually a + for me since she always pays the penalties...

- Hakrjak

 

[Yankees338]

One of my renters is paying late this month, but she pays late like 50% of the year. haha... It's like an automatic rent increase for me with the late penalty I guess, so no biggy. She must not be a good money manager because she's lived in my place for 4 years now and she's been late every Christmas since day 1. It's a good thing I don't "Need" the money immediately, otherwise I'd be pissed -- but being in a strong position makes it no big deal and actually a + for me since she always pays the penalties...

- Hakrjak

Just outta curiosity, how much are late payments usually?

 

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[hakrjak]

Just outta curiosity, how much are late payments usually?

There is some calculation depending on the # of days late, my PM handles it... but for the 6 months she's been late this year it's averaged an extra $50-75 bucks in my pocket per month. Her rent is only $500 on this small place, so the late payments aren't super high, but they are enough to make me smile when I see those checks roll in

- Hakrjak

 

[biophase]

Chicago - been raising rents every year, from $1750 to $1835 for my 700sf condo. I charge $35 per application. No vacancy.
SLC - Rents increased by $100 to $1100. Tenants are shaky, but PM says alot of people looking to rent. They charge for applications, not sure how much. Vacancy seems normal.
Phoenix - Got it rented for $100 more at $1695, but I hear rents are going down. Charge $35 app. fee. Tenant is behind in payments. No vacancy yet... but rent is 3 weeks behind.

Potential tenants have no problem paying the $35 application fee. Just casually mention it like its normal.

My ARMs are adjusting down monthly...

Values seem to be holding steady in Chicago and SLC. Phoenix is dropping like a rock.

My late fees are $25 + $5/day.

 

[Runum]

I think vacancies in my area are up some. I used to never have a vacancy last over 2 weeks. My last vacancy was just over a month. I am having to get a little more pushy about requesting payment. More tenant excuses than in the past. I can tell the tenants are more edgy. I charge $50 non refundable application fee. The fee reduces the problem applicants. My late fee is $50 + $5 a day. Sometimes I collect the late fees and sometimes not. Courts around here won't enforce late fees if the tenant can pay the rent at all.

 

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[randallg99]

tsbells - are the problems you mention directly related to the local economy? a large part of Ohio is dependent upon the auto industry, no ?

another point about late fees: check local laws as to how much can be charged. I charge 10% of the rent after 5 days in one area, but in others there are flat fees. If you overcharge, a judge (during eviction process) can all but kill the landlord's recovery costs and worse, can offer tenant other options

Rent rates up? down?
Application fees up? down?
Vacancies? Longer? Shorter?

Regarding my SFRs - (I have 2) and they have both been rented for years. I have easily raised rents using CPI index.

App fees for my apartments: my PM manages 8 units for me in Phila and has no problem charging.

There are 8 other units that are closer to my home and that I personally oversee: for these I will charge the app fee and use it towards the first month's rent/deposit if they are accepted. The fee is only $25 and my cost for investigations have not changed. (I use www.sterlingtesting.com) I think most tenants expect to pay this fee and I have been rarely questioned.

I had a vacancy problem in the apartments primarily due to job transfers and job losses and this has been my main concern. But my applications increased dramatically and the pleasant change has been welcomed because I had success in picking and choosing tenants with stable employment histories.

The foreclosure rate is dramatically rising in NJ which can mean more apartment seekers thus driving up demand.

As a result, I have raised rents by $25-$75 per unit (yay!)

The local housing markets and local economy can either wreak havoc on the apartment markets or bring good fortune.... time will tell....

A foreseeable problem is many townships/cities are seeing a slow down in tax receipts and the burden will be placed on the existing "good" tax payers. Muni bond offerings are becoming hard sells so the last resort is raising RE taxes. Handwriting is on the wall so it's important to keep the rents at levels to sustain any dramatic increases in the upcoming years.

R

 

[NoMoneyDown]

Mine were already rented before the economic "fallout" began in Sep/Oct, so I've been "lucky" in that respect. I have a new rental coming on the market next month, and I've already started advertising it with no calls yet. It's a higher-end home in a golf course community - something I haven't tried doing yet - so it may be combination of pricing right and the economy. I started at $1475 with my 1st ad, and have dropped the price $50 twice already. I've priced in at least 3 months of holding costs, but hope to get it occupied by NLT Feb. There was a home about 5 houses up that sat for about 7 months at both For Sale and Rent, which finally got occupied last month. Several others have sat for longer, but they have been just For Sale.

 

[hakrjak]

Phoenix - Got it rented for $100 more at $1695, but I hear rents are going down. Charge $35 app. fee. Tenant is behind in payments. No vacancy yet... but rent is 3 weeks behind.

How far do prices in Phoenix have to fall before retired people who are now no longer wealthy from the sale of their California homes can afford to begin buying in there again? It's still a very desireable place for a lot of people to live, I just think the prices got out of control from all the speculation and the people selling their California homes for mad profits and diving into the spec homes. I'll buy in down there if we get to that point, at the very least so that I'll have a paid off home to retire to one day when I'm old and looking for a warm place to go

- Hakrjak

 

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