Rental Market during recession- 2008

[Hamill Alex]

Hello,

I’m interested in hearing from people who had portfolios during 2008. Some insight on what to expect, things to think about and general planning would be awesome. Who knows what’s going to happen and I would like to prepare for the worst.

1. What did rents do? Decrease? Stay Stagnant?

2. How were section 8, voucher programs and government subsidy apartments affected?

3. How does the unemployment rate affect the rental market?

[Evan Polaski]

@Hamill Alex my experience is a little different.  Rents were mostly flat, due to step down effect.

Section 8 in Cincinnati is very inefficient, so I was feeling like I was getting above market rents for my properties.  But as we came out of recession, they did not keep up with market, hence why I stopped renting to them.

Yes, unemployment effects rental properties, but again this is very dependent.  People will go to great lengths to not be homeless.  As I have mentioned, rent is always the second bill on people's mind, right after putting food on their plates.  And looking at 2008-2011, multifamily as a whole (not single family rentals) had the lowest foreclosure rate of any real estate asset class.  So yes unemployment effects rentals, but not as dramatically as other sectors of the economy or classes of real estate.