Top 4 Opportunities for Owners in a Hot Rental Market

As a Charlotte residential property manager, we are seeing the rental market really heat up!  There are fewer buyers and more renters; this causes rental prices to go up and vacancy rates to go down.  In the home sales market, sales prices and activity continue to stagnate making it a less ideal time to sell.  The laws of supply and demand are in full effect!

 

We are also seeing an uptick in inquiries about purchasing the rental homes we have in inventory when they are vacant and on the market.  Unfortunately, the dollar figures for the offers to purchase are not overly appealing.  Buyers are still bargain hunting.

 

So what does this mean strategy-wise to an owner of a rental property?  It means there is a lot of flexibility available on the rental side to improve financial positioning.  The top 4 opportunities in this hot rental market for rental home owners are:

 

1.  Raise rents: Rental comparables are rising.  Make sure you are receiving market rate rent on lease extensions.

 

2.  Lock-in security: If security is the #1 goal, offer to extend existing leases at the same rate for longer periods of time.  Explain the good deal you are offering the tenants.

 

3.  Fix up vacant properties and raise the rent: If you have a vacant rental property that is in marginal to bad shape, it is time to make the investment to fix it up.  The market will reward you for this work with higher rents that will pay for the repairs.

 

4.  Ride the hot rental market out and then sell: Enjoy the higher rents and subsequent increase in cash flow while the getting is good.  Wait until your home’s value appreciates to the price you want before putting it on the market for sale.  If your house is on an amortizing mortgage, even better!

 

As a wise man once said, “Don’t fight the trends, ride the trends.”  Use this hot rental market as an opportunity to make more now and later!

 

Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which  specialize in rent-to-own (lease options) and rent-to-sell homes.  His newest book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!)