Renters' Market No Longer!

D

Durkee

500+ Posts
Austin, after a long period of being a renters' market full of great move-in specials and free rent concessions, is now swinging back to being a lessors' market once again. As the occupancy rate heads toward the low to mid-90% mark, properties are filling up rapidly, and the specials are drying up along with the availability of vacant units.

I have mixed feelings about this: It makes me happy b/c the tight market makes my services as a locator that much more valuable to the public, b/c I know what is available and what is not and who still has good deals, but I also hate to see people get gouged on their rents, too.

August move-ins are getting tight, so good luck to you if you haven't found something yet, or shoot me a PM if you need some help.
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I just sold some rental property in Austin last week. Had it for 8 years though and made a decent profit. I don't think I will get into the landlord game anymore, too much of a pain in the ***, has to be an easier way to make investments.
 
nope, they want anywhere from 5-10 % of the gross rent, which would have cut too deeply into my monthly positive cash flow.

Note to world -- don't get into the rental business.
 
Durk--same thing is happening in Uptown (Dallas). I signed a lease last March/April and got 2 months free pro-rated which brought my rent to about $1/sf (2/2, pool view). At the time almost every place in the area was giving 1 or 2 (one place even 3) months free. When my lease was up for renewal I called around to see what the specials were like this year. There were hardly any and I think the longest concession was 2 weeks and every place claimed to be between 90-100%. This year my rent would have been about $1.30-1.40/sf if I had moved, so I quickly signed a 13-month extension at 3% over last year's discounted price
 
Hornin, I did some calling around for a customer that needs a 1/1 for an ASAP move-in, and I couldn't find but one place in his price range that wasn't tiny. I started asking the properties what their occupancy rates were, and the lowest I heard was 94.5%

It's going to be a long winter.

And ditto to what was said about property management!!! Such a pain in the *** that IMO 5-10% is nowhere close to being worth it.
 
durkee, were you being sarcastic about property management? My profit margins were low. I wish I could ahve used outside management, but I could not afford it, so I had to take the pain of managing it and repairing it myself.

their fees are outrageous if a property is heavily financed leaving no room to pay 5% on the gross, when the profit itself is only 10-15% of the gross rent per month. Otherwise the property would be a financial liabilty.
 
No, I was not being sarcastic. From an agent's point of view, 5-10% is not worth dealing with all of the headaches that you are currently having to handle yourself. Most agents that do property management have quite a few properties that they are responsible for, which means a lot of calls at all hours of the night for repairs, dealing with irate/irresponsible tenants, doing make-readies when tenants move out, and being responsible for keeping the units occupied. I just don't think that the headaches are worth it.
 
Durkee, do you deal at all with class "C" properties? If so what are you seeing. If not could you surmise?
 
My family and I plan on buying a 2br condo for me around campus. I'll find a nice quiet roommate who will help pay for half my mortgage. When my sister attends UT in a few years, we'll give her a condo and then my parents and I will repeat the process.

Eventually, we hope to own at least a handful of properties around campus. I think UT makes the campus area recession proof.
 
FYI-I live in an older apt. (~15 years old) and they have went down from a high of $685 for a one bedroom in NW Austin to $459 in three years.
 
Who knows what will become of West Campus in the future w/ all the changes. Be leary of what McCrackhead and others want. They could not plan their way out of a bag. There is going to be tons of new apartment buildings. Word is out that Far West and nicer places that don't reek of frat boys and urine are to be had. Hold off on buying too much West Campus till you see how stuff is to be rezoned and where that would leave you. You may not wish to compete w/ a brand new place. They will snap those up first and you have to maybe lower rent...yet your taxes are the same.
 
Loop(y) has a good point about what is about to happen in the West Campus area.

Durk,
Interesting to hear about concessions starting to dry-up. I've been working on retrospective assignments so I haven't paid much attention to current rents.
 
there will never be a shortage of frat/sorority types that have parents that will pay any amount of money to keep their kids on west campus.
 
Well, I've been out of the loop for a few months while I have switched brokers, so I'm not 100% sure if my forecast held true or not, but from what I am hearing I think it did. I do want to apologize to those of you that sent me PM's for help that I didn't answer because I haven't been online, though.
 
In driving around I still see some signs hanging from buildings but they are worded differently. No more first months rent free, no more dvd's. Just "lowest prices" and "special rates for pre-leasing" type stuff. Like this store in DC that had a sign saying, "Going out for Business". People read it as they were going out of business and piled in there. Their prices were the same but were always crowded....for months. They never closed.
 
I have a 3-2-1 duplex for rent with a huge backyard and it's les than a 3 minute walk to Taco Shack on Spicewood Springs Road

PM if you want more info
 
Damn, I was doing some research for two different people yesterday afternoon, and I'm really surprised at how the really good specials have seemed to dry up! Not only were the deposits way higher, but many of the nicer properties have reinstated "admin fees," which are essentially deposits that you never get back and are ridiculous! Rents are still a little less than at the market's high water mark, but significantly more than last year, and the "busy season" hasn't even gotten into full swing yet!

Good deals are still out there, it's just a little harder to find them. What a difference a year makes in real estate in Austin!
 
I may drop you a line, I am graduating in May and need a place for June/August up somewhere that isn't too far from the Dell Round Rock campus.
 
That's cool, but the earlier we start looking, the better. Most people move in the summertime, so prices will be going up and specials disappearing the closer we get to summer. Shoot me a PM, and I'll do a preliminary search for you.
 
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