Impact of Seasonality on Vacancy Rates and Duration

[Kenneth Jenkins]

This winter was pretty cold in Metro Detroit, but it was nothing compared to the rental slowdown we have seen from November until now.  Our average days on market inside our portfolio extended to roughly 49 over this time period.  This is about 12 days longer than the same period last year.  In softer areas, like C- Detroit proper we are seeing lower demand.

As always we recommend that rental comparisons need to be independently arrived at.  As an investor you should not be relying on the realtor selling you a property as the sole factor in determining it's market rental rate.  Listing rental rates do NOT equate to signed rental rates.  The number one factor in renting a property (assuming it has market competitive in finishes) is if it's priced appropriately.  So make certain you are working with someone who has access to data on actual signed rental rates.  This typically means a licensed property manager.

That being said, we took 7 holding deposits last week on our 26 available rental properties, and the weather has gotten above freezing for a couple of days last week.  So now, it's officially March in Michigan again!! Last year we started March with 20 vacancies and ended with 0.    I have a suspicion this year will be the same.