CNN: Rents heading up significantly in 2006 ("A good year for landlords")

[Bush_Eats_Beef]

Rents heading up in '06
Apartments may get significantly more expensive to rent this year.
By Les Christie, CNNMoney.com staff writer
April 21, 2006: 12:36 PM EDT

http://money.cnn.com/2006/04/18/real_estate/apartment_rents_head_higher/index.htm?cnn=yes

NEW YORK (CNNMoney.com) - Apartment rents are headed up in 2006. After a few years of little movement, residential rents are expected to climb substantially, even as home prices may finally be plateauing.

"This will be a good year for landlords," says Greg Willett, vice president for research and analysis at M/PF YieldStar, a consulting firm serving the multi-housing industry. "There will be rent growth as vacancy rates come down. Landlords feel comfortable enough now to start raising rents again."

According to Willett, whose firm tracks 57 markets, rents will likely rise between 5 percent and 6 percent in 2006.

Several factors are contributing to landlord optimism, but what they all boil down to is that more Americans are being driven into the apartment market due to the increased expense of home ownership.

[phantom power]

1. Rent rises with mortage interest rates.

[corporate_mike]

2. Rent rises with real estate prices

[Squeech]

12. Not really

Last few years, rents have leveled off as purchasing prices continued to climb. This was considered one of the signs that the housing bubble was about to burst.

[converted_democrat]

4. That's a good point.. n/t

[RethugAssKicker]

3. Is this just NY... or national

[Bush_Eats_Beef]

6. National

If you click on the link and read the article it discusses it in terms of region...I can only post 4 paragraphs here.

:patriot:

[seriousstan]

5. Rent rises with property taxes and utilitiy rates.

As a landlord

[wicket]

7. My rent was raised $100 a month last October

If it goes up by that much again this year we won't be able to afford it :scared:

[Horse with no Name]

8. So what they are really saying is

That foreclosures are up--these people will need a place to live.
Let's raise rents since they won't be able to buy homes again.
The landlords will buy up the foreclosures at reduced rates.
Screw me once...Screw me twice...won't get screwed again.

[converted_democrat]

9. Another DU'er posted that he had heard on the Radio that foreclosures

were up 72%..

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x1030176

[Horse with no Name]

11. yep.

It never ends. So now the people who had their homes foreclosed MIGHT be able to find an apartment for about the same price as the home they couldn't afford.
It is criminal.

[converted_democrat]

17. I'm not sure how it's going to work out.. Many apartments that are run

by property management companies, and property groups have tough credit standards.. I guess they will have to relax their standards.. People that go through foreclosures usually end up with serious credit issues.. I don't know how it's going to work out..

[Horse with no Name]

18. They'll relax them

and require hefty deposits and terms.

[Bush_Eats_Beef]

13. That's what I'm hearing...

Landlords smell the blood of failed home buyers in the water, and the same opportunism that led to house flippers and speculators driving home prices up will swell rental rates as well.

Not "ALL" landlords. MANY landlords...just not "ALL."

[Brazenly Liberal]

10. I can't believe what's happened to rents.

When we bought this farm, we were living in a three-bedroom apartment in the city. At that time, the mortgage payment we signed on for was about $50 more per month than we had been paying in rent. That was 14 years ago. Now that same apartment is going for nearly THREE TIMES the monthly mortgage payment on the farm. Unbelievable. I don't see how anyone can afford to rent anymore.

[RethugAssKicker]

16. I'm a landlord... Many people are using room mates..

But it usually doesn't work for more than 1 year.

[Blue_In_AK]

14. I'm a landlord

(live-in duplex) and I haven't raised my rent in at least 10 years. Plus I pay all the utilities. My tenants have it v-e-r-y good. The way I look at it, they pay almost 70 percent of my mortgage ... the least I can do is keep them happy.

[Bush_Eats_Beef]

20. I have what appears to be a good landlord right now...

...time will tell how often the rent is raised, and by how much. In terms of a landlord - tenant relationship, though, so far so good...knock on wood.

A couple of years ago I lived in an apartment that was purchased by Archstone. My advice to anyone reading this is never, never, NEVER rent an Archstone apartment. Too many reasons to go into here...just don't.

At the peak of the dot-com bubble, right before it burst, I was paying $1650 a month for a one bedroom apartment. I kept an eye on rates, and my next scheduled lease renewal would have been to $1875 per month. Then the bubble burst and they lowered my rent to $1200.

They had a big "pyramid" chart on the back of their office door with all of the apartments penciled in and the lease expiration dates for each. The people who worked in the office were in fierce competition with each other to sign tenants to lease renewals. Whoever got the most renewals (at the highest renewal rate) each month got whatever perk Archstone handed out.

Archstone holds a well-deserved reputation for being all smiles when you sign the lease and having an abrupt attitude change immediately thereafter. They also seemed to come up with an excuse to have to enter your apartment at LEAST once a month to inspect SOMETHING.

[Horse with no Name]

22. I know what you mean

I used to rent a townhouse from Trammel-Crow.:scared:

[Dr. Jones]

26. It's all about SALES...

Archstone holds a well-deserved reputation for being all smiles when you sign the lease and having an abrupt attitude change immediately thereafter.

I learned through careful research of the apt. industry that it's all about sales. Those smiling leasing agents? Salespeople - that's all they are. They have a set methodology to sell you on an apartment, and they have quotas as well. The idea is that an empty apartment is a liability and costs the management company money. Kinda like airline seats - an empty seat is a liability in that it costs the airlines money when it could be filled by a paying customer.

Once when I was looking for an apt., the sleazy, pushy leasing agent was trying to push me into signing over a deposit check, like THAT DAY! He also kept saying, "You came at a great time, we're having a Lease A Thon." If thoughts could speak, there'd have been a huge "bullshit" sign hovering right over my head.

I found in many apt. communities (have lived in several) that they're VERY interested in you and nice to you before/when you sign the lease, but once you're in, it's "who the hell are YOU, we're busy, get out of my FACE and take care of the damn problem yourself!" But that's a given I guess. Once you buy the car the salesman has no real incentive to be nice to you anymore.

[RethugAssKicker]

21. Ten years ? and pay all utilities ?

unbelievable... Are you Mother Teresa ?

[Blue_In_AK]

25. No, I'm not.... :-)

Actually, I've been very fortunate in that I've been able to rent the apartment to friends or family ever since I bought this place in 1990. The good part is that I know who I'm dealing with - the bad part is that I can't bring myself to raise the rent because I'm familiar with everybody's financial situations. When my daughter and her family moved out in February, I was thinking I'd raise the rent if I had to bring in strangers, but as it turned out I was able to rent it to one of my other daughter's friends and her mom, so I kept the rent the same since I know they're struggling somewhat.

Maybe I'm just too nice, but I'm a big believer in karma. I've found that my tenants have been kind to the apartment and treat it like it's their own, maybe out of consideration for the breaks I've given them.

[Bush_Eats_Beef]

27. I'm a big believer in karma too...

...and the world would be a better place if it had a few more landlords like you.

There's nothing wrong with a person making a profit...don't get me wrong. But there are people out there who are acutely aware of the fact that they are making a profit from people who are struggling and suffering, and the best thing to do is turn the screws a little bit tighter.

The guy who used to cut my hair had a viewpoint similar to yours. He co-owned a rental home with his brother. My friend was hesitant to raise the rent because the tenants had been there a long time, paid the rent promptly, never asked him for much and were good people. His brother was jumping up and down during the "dot com" peak, screaming about how much money they could be making if they matched local rents. My friend, to his credit, stood his ground. When he told me this story, he said "Why would I want to make those people suffer?"

Regarding your other comment (tenants treating the property like it's their own)...I definitely do that for my landlord. I'm paying the current going rate where I live...but I'm also paying $200 less per month than the previous tenants because he appreciated the stability in my past renting history. I've only lived here a year, so I don't know what the future holds. My landlord DID have one previous tenant who caused some SERIOUS damage to his place, and cost him some serious coin in the process. So he DOES value a "good tenant"...I just don't know how MUCH yet.

:toast:

[Dr. Jones]

15. Back in 2001,

our 1-bed 812 square foot in Northern Virginia was $1100/month. They wanted to raise that another $50 for a 12-month lease, or an extra $200 for a month-to-month. We moved out of state.

[QC]

19. There's going to be a lot of desperate speculators

eager to get whatever they can out of their unsellable flipper white elephants. I suspect you will see cheaper rents in some places.

[MadHound]

23. I'm so glad that I bought a house, and don't have to play

Renter roulette any more. It is outrageous what apartments and houses are renting for these days. I live near a college town, and the landlords there are just plain fiends. They have a captive audience and they know it, thus they charge outrageous amounts, and doing as little as possible to keep their property in shape. On top of which they want up front first and last month rent, along with a security deposit, which in many cases you might as well kiss it goodbye.

Meanwhile, more and more affordable homes and apartments for working class and the poor are disappearing. No wonder the homeless rates are going up, nobody can afford to live in an apartment or house anymore.

[catmandu57]

24. We have an oversupply

of apartments here, and they're building more now, tagged as an elderly complex. The landlords went to the city council trying to stop the new developement, no dice.
I don't know how this is going to affect our market.