Is your rental market on fire?

[Nathan Gesner]

I have hardly been on BiggerPockets all summer because our market is on fire! I was busier than the proverbial one-legged man during COVID, had about two weeks of normalcy, and then the market exploded.

I manage 400 rentals and don't have any vacancies. I have to force vacancies to allow me time to inspect and clean/repair between renters. When I list a house for rent, I typically have it rented within a week and 3-6 weeks before it's even available. We're also experiencing a strong sales market with quick sales, all-cash purchases, and even competitive bidding. A large percentage of this is due to people moving from coastal cities to escape the craziness of 2020, high taxes, etc.

What are you seeing in your market?

[JD Martin]

Ours is an inferno. I wish I had double what I have. Absolutely no inventory; when one of my places comes up it is gone in a week, from the first day of listing to the day of lease signing/payment. 

[Jay Hinrichs]

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

@JD Martin  in your market same question..   

One thing I have been thinking is that these moratoriums on evictions we are facing on the west coast and other rent controls etc.. are really going to hurt the renter that is NOT fully qualified to rent.. I think you will see a gap get wider and wider.. the landlords with the decent rentals are going to be uber cautious going forward the tenant that cant check all the box's is going to get forced to look as less quality housing were the landlords might be more lenient given the quality of their product. And or like in Portland you can just take virtually any SFR out of the rental pool and sell to a owner occ .

Thereby reducing the rental stock even further .. 

[JD Martin]

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

@JD Martin  in your market same question..   

One thing I have been thinking is that these moratoriums on evictions we are facing on the west coast and other rent controls etc.. are really going to hurt the renter that is NOT fully qualified to rent.. I think you will see a gap get wider and wider.. the landlords with the decent rentals are going to be uber cautious going forward the tenant that cant check all the box's is going to get forced to look as less quality housing were the landlords might be more lenient given the quality of their product. And or like in Portland you can just take virtually any SFR out of the rental pool and sell to a owner occ .

Thereby reducing the rental stock even further .. 

We have a lot of growth from in-migration of retirees and work-from-home's that are attracted to our climate, low taxes (no income tax, relatively low property taxes), scenic area (mountains), and low cost of housing, though that last part is changing as the demand continues. It used to be a typical supply on the MLS for my city was about 1,000 homes at any time, and something like 90 days from list to close. Right now there's about 300 homes listed - and this number has been decreasing gradually each month for about 2 1/2-3 years, so it's not virus related - and something like 45 days from list to close. It's just nuts.

As the prices have increased, a lot of the lower-end houses that people like me would have bought and maintained as rental properties have been bought by homeowners and taken off the market. 4-5 years ago when I advertised a house for rent, I had maybe 6-12 competitors (same relative price, same relative size, same relative neighborhood) at any one time. Today it's not uncommon that I have the only house listed in my slot. I just had one come up for rent last week. It was the only house listed in that slot and it was 5 days from list to signing the lease and receiving payment. It's a good problem to have!

[Jay Hinrichs]

Originally posted by @JD Martin:

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

@JD Martin  in your market same question..   

One thing I have been thinking is that these moratoriums on evictions we are facing on the west coast and other rent controls etc.. are really going to hurt the renter that is NOT fully qualified to rent.. I think you will see a gap get wider and wider.. the landlords with the decent rentals are going to be uber cautious going forward the tenant that cant check all the box's is going to get forced to look as less quality housing were the landlords might be more lenient given the quality of their product. And or like in Portland you can just take virtually any SFR out of the rental pool and sell to a owner occ .

Thereby reducing the rental stock even further .. 

We have a lot of growth from in-migration of retirees and work-from-home's that are attracted to our climate, low taxes (no income tax, relatively low property taxes), scenic area (mountains), and low cost of housing, though that last part is changing as the demand continues. It used to be a typical supply on the MLS for my city was about 1,000 homes at any time, and something like 90 days from list to close. Right now there's about 300 homes listed - and this number has been decreasing gradually each month for about 2 1/2-3 years, so it's not virus related - and something like 45 days from list to close. It's just nuts.

As the prices have increased, a lot of the lower-end houses that people like me would have bought and maintained as rental properties have been bought by homeowners and taken off the market. 4-5 years ago when I advertised a house for rent, I had maybe 6-12 competitors (same relative price, same relative size, same relative neighborhood) at any one time. Today it's not uncommon that I have the only house listed in my slot. I just had one come up for rent last week. It was the only house listed in that slot and it was 5 days from list to signing the lease and receiving payment. It's a good problem to have!

Yup thats were the money is made when demand out strips supply.. in markets were supply is basically endless then prices just never really go anywhere..  

what city by the way or do i have to get my atlas out ?  has to be a large city if there was 1000 listings.

[JD Martin]

Originally posted by @Jay Hinrichs:

Originally posted by @JD Martin:

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

@JD Martin  in your market same question..   

One thing I have been thinking is that these moratoriums on evictions we are facing on the west coast and other rent controls etc.. are really going to hurt the renter that is NOT fully qualified to rent.. I think you will see a gap get wider and wider.. the landlords with the decent rentals are going to be uber cautious going forward the tenant that cant check all the box's is going to get forced to look as less quality housing were the landlords might be more lenient given the quality of their product. And or like in Portland you can just take virtually any SFR out of the rental pool and sell to a owner occ .

Thereby reducing the rental stock even further .. 

We have a lot of growth from in-migration of retirees and work-from-home's that are attracted to our climate, low taxes (no income tax, relatively low property taxes), scenic area (mountains), and low cost of housing, though that last part is changing as the demand continues. It used to be a typical supply on the MLS for my city was about 1,000 homes at any time, and something like 90 days from list to close. Right now there's about 300 homes listed - and this number has been decreasing gradually each month for about 2 1/2-3 years, so it's not virus related - and something like 45 days from list to close. It's just nuts.

As the prices have increased, a lot of the lower-end houses that people like me would have bought and maintained as rental properties have been bought by homeowners and taken off the market. 4-5 years ago when I advertised a house for rent, I had maybe 6-12 competitors (same relative price, same relative size, same relative neighborhood) at any one time. Today it's not uncommon that I have the only house listed in my slot. I just had one come up for rent last week. It was the only house listed in that slot and it was 5 days from list to signing the lease and receiving payment. It's a good problem to have!

Yup thats were the money is made when demand out strips supply.. in markets were supply is basically endless then prices just never really go anywhere..  

what city by the way or do i have to get my atlas out ?  has to be a large city if there was 1000 listings.

Tri-Cities, TN (Johnson City/Kingsport/Bristol). I mostly am referring to JC/Washington County which is my area but the three are each within 20 minutes of each other so it's considered one metropolitan area. We also have the advantage (from a supply standpoint) of being hemmed in by mountains & national park/national forest, and a pretty severe lack of buildable land. 

[Karl B.]

I'm 100% rented out. One tenant will be moving in September (out of state) and some long-time tenants might want his apartment which would be great as I could renovate the old apartment (it needs it) and raise the rent on it (the downstairs tenants are inherited and I didn't raise the rent on them - they're paying at least 20% under market). 

I don't know how hot the rental market is in PA - it's been about six months since I had a vacancy and at that time as usual there were plenty interested and most didn't qualify.

My house in L.A. is in escrow. That market is stupid hot. I spent some money to renovate the place prior to selling and am seriously selling it for almost 3.5X what I paid for it back in 2012. I should probably make a video or do a deal diary on it; I can't believe what it's going to potentially sell for - it's crazy. I'm seriously getting around 30% more for the house than I thought I would. 

In Columbia they're listing properties and the same multi-family properties are languishing on the MLS. I want to buy a larger multi but there's nothing remotely interesting and I'll network to find something good that's nearby after my house closes and I have the needed funds. If I have to wait for a downturn I will. I might even buy some value-add for cheap just so I can work - it's the best diet ever.

[Matt M.]

@Nathan G.

Sales and rentals on fire here in the Lehigh Valley/A.B.E. Area of Pennsylvania

[Jay Hinrichs]

Originally posted by @JD Martin:

Originally posted by @Jay Hinrichs:

Originally posted by @JD Martin:

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

@JD Martin  in your market same question..   

One thing I have been thinking is that these moratoriums on evictions we are facing on the west coast and other rent controls etc.. are really going to hurt the renter that is NOT fully qualified to rent.. I think you will see a gap get wider and wider.. the landlords with the decent rentals are going to be uber cautious going forward the tenant that cant check all the box's is going to get forced to look as less quality housing were the landlords might be more lenient given the quality of their product. And or like in Portland you can just take virtually any SFR out of the rental pool and sell to a owner occ .

Thereby reducing the rental stock even further .. 

We have a lot of growth from in-migration of retirees and work-from-home's that are attracted to our climate, low taxes (no income tax, relatively low property taxes), scenic area (mountains), and low cost of housing, though that last part is changing as the demand continues. It used to be a typical supply on the MLS for my city was about 1,000 homes at any time, and something like 90 days from list to close. Right now there's about 300 homes listed - and this number has been decreasing gradually each month for about 2 1/2-3 years, so it's not virus related - and something like 45 days from list to close. It's just nuts.

As the prices have increased, a lot of the lower-end houses that people like me would have bought and maintained as rental properties have been bought by homeowners and taken off the market. 4-5 years ago when I advertised a house for rent, I had maybe 6-12 competitors (same relative price, same relative size, same relative neighborhood) at any one time. Today it's not uncommon that I have the only house listed in my slot. I just had one come up for rent last week. It was the only house listed in that slot and it was 5 days from list to signing the lease and receiving payment. It's a good problem to have!

Yup thats were the money is made when demand out strips supply.. in markets were supply is basically endless then prices just never really go anywhere..  

what city by the way or do i have to get my atlas out ?  has to be a large city if there was 1000 listings.

Tri-Cities, TN (Johnson City/Kingsport/Bristol). I mostly am referring to JC/Washington County which is my area but the three are each within 20 minutes of each other so it's considered one metropolitan area. We also have the advantage (from a supply standpoint) of being hemmed in by mountains & national park/national forest, and a pretty severe lack of buildable land. 

I looked it up and the topo maps..  looks like a nice part of the world.. I think the closest I have gotten in Nashville on one side and Charlotte on the other.. the only state I have never been to is West Virginia.  These tertiary markets I like a lot on the buy hold aspect. I suspect you dodge much of the big city issues that seem to be plaguing us these days. 

[JD Martin]

Originally posted by @Jay Hinrichs:

Originally posted by @JD Martin:

Originally posted by @Jay Hinrichs:

Originally posted by @JD Martin:

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

@JD Martin  in your market same question..   

One thing I have been thinking is that these moratoriums on evictions we are facing on the west coast and other rent controls etc.. are really going to hurt the renter that is NOT fully qualified to rent.. I think you will see a gap get wider and wider.. the landlords with the decent rentals are going to be uber cautious going forward the tenant that cant check all the box's is going to get forced to look as less quality housing were the landlords might be more lenient given the quality of their product. And or like in Portland you can just take virtually any SFR out of the rental pool and sell to a owner occ .

Thereby reducing the rental stock even further .. 

We have a lot of growth from in-migration of retirees and work-from-home's that are attracted to our climate, low taxes (no income tax, relatively low property taxes), scenic area (mountains), and low cost of housing, though that last part is changing as the demand continues. It used to be a typical supply on the MLS for my city was about 1,000 homes at any time, and something like 90 days from list to close. Right now there's about 300 homes listed - and this number has been decreasing gradually each month for about 2 1/2-3 years, so it's not virus related - and something like 45 days from list to close. It's just nuts.

As the prices have increased, a lot of the lower-end houses that people like me would have bought and maintained as rental properties have been bought by homeowners and taken off the market. 4-5 years ago when I advertised a house for rent, I had maybe 6-12 competitors (same relative price, same relative size, same relative neighborhood) at any one time. Today it's not uncommon that I have the only house listed in my slot. I just had one come up for rent last week. It was the only house listed in that slot and it was 5 days from list to signing the lease and receiving payment. It's a good problem to have!

Yup thats were the money is made when demand out strips supply.. in markets were supply is basically endless then prices just never really go anywhere..  

what city by the way or do i have to get my atlas out ?  has to be a large city if there was 1000 listings.

Tri-Cities, TN (Johnson City/Kingsport/Bristol). I mostly am referring to JC/Washington County which is my area but the three are each within 20 minutes of each other so it's considered one metropolitan area. We also have the advantage (from a supply standpoint) of being hemmed in by mountains & national park/national forest, and a pretty severe lack of buildable land. 

I looked it up and the topo maps..  looks like a nice part of the world.. I think the closes I have gotten in Nashville on one side and Charlotte on the other.. the only state I have never been to is West Virginia.  These tertiary markets I like a lot on the buy hold aspect. I suspect you dodge much of the big city issues that seem to be plaguing us these days. 

It's a great place to invest (and to live). If you have to evict someone you can have them gone in 3 weeks, which is pretty quick. Virtually all of our tenants have been good people and we've never had to go down that road (we'd try to work something out easier for everyone if it got to that point anyway). Housing was affordable to buy as rental property. We've never had a population decrease and have had 30+ years of pretty good growth, with a couple small blips (one when I was building!). Very low crime rate. Good climate. The one thing that's always been tough here has been jobs, which always kind of held the market back to anyone that wasn't a retiree, but with more people working remote than ever that is changing pretty quickly. Our last two vacancies had strong interest from out-of-towners looking to relocate here.

[Jay Hinrichs]

Originally posted by @Matt M.:

@Nathan G.

Sales and rentals on fire here in the Lehigh Valley/A.B.E. Area of Pennsylvania

I have to think you could take a pointer put it on Manhattan  then draw a semi circle out 100 miles and you will see a lot of activity in those markets in the coming days months years..  especially ones were the school districts are quality.  

[Matt M.]

@Jay Hinrichs

You are correct. There was an article in the paper here a month ago about the influx of NYC people coming this way 

[Jay Hinrichs]

Originally posted by @Matt M.:

@Jay Hinrichs

You are correct. There was an article in the paper here a month ago about the influx of NYC people coming this way 

Ya i could really see that in Easton Bethlehem etc those are some really cool towns  that could come back to their glory days. 

back to the future as it were.. 

[Matt M.]

@Jay Hinrichs

I just listed (10 mins ago) a freshly cleaned up rental in Pen Argyl (slate belt) on FB marketplace for a client. Within minutes got first hit.. from Manhattan.

[Elise Bickel Tauber]

Pittsburgh market is just the same. Things are staying about 3-4 days before being leased and we are listing about 60 days prior to vacancy so we are sitting with almost nothing.

It's one of the strongest markets I've seen in a very long while.

I do expect that in October we are going to see a slowing of the market between COVID concerns and also the election, so enjoy it while you can!

[Caleb Brown]

As others said it's red hot here in KC no inventory. 

[Bjorn Ahlblad]

[Nathan Gesner]

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

The vast majority of renters/buyers are moving from larger cities, generally in coastal states, and they are moving here to escape taxes and the crazy protests/riots/shutdowns and other general 2020 craziness that is prevalent in larger cities. These things have existed for many, many years but it looks like 2020 has finally broke the camel's back for many people.

I just spoke with the broker of our busiest brokerage and he said 95% of his clients have been out-of-state buyers this year. I see vacant land that has sat on the market for 10+ years and now it's under contract. Homes are listed for 20% higher than they would have listed last year and they're getting cash offers for above asking price in two weeks. Appraisers can't keep up.

[JD Martin]

Originally posted by @Matt M.:

@Jay Hinrichs

I just listed (10 mins ago) a freshly cleaned up rental in Pen Argyl (slate belt) on FB marketplace for a client. Within minutes got first hit.. from Manhattan.

That is so amazing to me. When I was a kid Pen Argyl was a cheap, somewhat run down nothing ville. Easton was downright scary.  

[Matt M.]

@JD Martin

You know my area? 

[Jay Hinrichs]

Originally posted by @Nathan Gesner:

Originally posted by @Jay Hinrichs:

Nathan,

Can one assume there was not a major employer move in to create a bunch of jobs and that many of these folks may be retired to semi retired or able to work from home??

there usually is a reason for in migration.  

The vast majority of renters/buyers are moving from larger cities, generally in coastal states, and they are moving here to escape taxes and the crazy protests/riots/shutdowns and other general 2020 craziness that is prevalent in larger cities. These things have existed for many, many years but it looks like 2020 has finally broke the camel's back for many people.

I just spoke with the broker of our busiest brokerage and he said 95% of his clients have been out-of-state buyers this year. I see vacant land that has sat on the market for 10+ years and now it's under contract. Homes are listed for 20% higher than they would have listed last year and they're getting cash offers for above asking price in two weeks. Appraisers can't keep up.

I see pop ulation of Cody is 10k peeps.. but there must be a bunch of little surrounding towns that make a kind of rural metro ?

[JD Martin]

Originally posted by @Matt M.:

@JD Martin

You know my area? 

 I lived in the Poconos for 6 years as a teenager. If you remember the big Homes books from the late 70s/early 80s I used to deliver those to supermarkets and restaurants. My mother did the typesetting and my father did the sales to the real estate companies. We would go to Newark (NJ) to the printers with a big box Econoline van and pick up 100+ bundles of them, and then we'd drive all over ABE/Scranton/Lake Wallenpapak/Poconos delivering them.

[Matt M.]

@JD Martin

You must be much older than me, haha. But I do remember them as a kid. I grew up in NJ but spent 2002-2015 in Upper Mount Bethel/Roseto (just up Bangor Mountain from Stroudsburg) 

Easton has seen a resurgence in recent years. Getting quite expensive to rent and buy. There’s still some crappy areas, but for the most part it’s on the up & up.  The slate belt- Bangor/Pen Argyl is still the same little towns, just getting more expensive as people are coming this way to escape the high costs of the Poconos. My wife is from East Stroudsburg area (and went to ESU), and she won’t allow us to buy anything that way. 

[Nathan Gesner]

Originally posted by @Jay Hinrichs:

It's not what I would call a metro. Cody is the largest town with the most money and business, but we're still less than 10,000 people. We get about 1 million tourists coming through each year and that's the primary draw / revenue generator. Powell is 22 miles away with 5,000 people and is mostly agricultural. Clark, Meeteetse, and Wapiti are within 30 minutes and have populations of 300 - 500. The entire county is 25,000.

[Timothy Doenges]

@Jay Hinrichs

WV is on fire right now. It’s insane really how busy we are.

[Matt M.]

@Nathan Gesner

Sorry pal, we didn’t mean to hijack your post :)