price of rentals as opposed to the number of forclosures?

Question

so i was wondering,

in areas with lots of homes on the market and people losing thier homes or on the verge of, does this mean the price of rents will rise or depreciate?

Account Closed · Answer

atopic, it makes no difference whether tenants are INFERIOR CATEGORY CITIZENS or not. An $800,000 house is still too expensive a house to be used as s rental.

Any tenant who thinks he DESERVES an $800,000 house, just like anybody else, is perfectly welcome to get a good job and buy one. Or he can come up here and rent one for $1,400 a month.

Account Closed · Answer

We saw rents go up a bit. But now, many of the houses that haven't sold (not foreclosures) are being placed into the rental pool. They are houses that are too good to be rentals, so they will be the ones to get the tenants.

Already, tenants making $1200 a month think they deserve a 2500 square foot house with granite countertops and a 3 car garage.

I've got some nice houses and the best tenants are passing mine by, because they can rent a McMansion for $200 a month more.

I've had 1 tenant move out because he could get a better house for not much more money.

It's looking like I am going to have to reduce rents back to last years prices. The last 2 vacancies I filled, I dropped rent by 5% before I got any callers. The new tenants for both of those barely qualified.

Eric Wang · Answer

San Jose has rent control except for duplex and single family home.
Kind of excessive 20% within 6 months.

Account Closed · Answer

Renters are not considered inferior in any form.

All that is being mentioned is that it is a renters market now. SO many people were attempting to sell property but can not. So they look to rent it out and at least offset some of the expenses not to mention making the property safer by it not being vacant.

This means that renters (just like sellers were just a year or two ago) can make demands for things.

Here in the Chicago market, we had a ton of apt buildings go Condo in the last few years. This had the effect of lowering the available supply of rental units. Some rentals filled up and rents increased, but now many of those CONDOS are now coming back as rentals. Not to mention there are quite a few nice HOMES that are rentals.

Although I haven't seen a decrease in rent, I just haven't been able to increase it to offset the higher utility costs, taxes, etc.

Jon Holdman · Answer

I read PNW differently.  I think he's saying that houses that are fixed up to be sold to owner occupants are getting turned into rental units because the owners can't sell them.  So, the expectations of potential tenants are higher because these nice units are available for rent.  Meaning then, that he has to discount units that are finished to a tenant level finish.

No implication, as I read it, about any "inferior category citizens".  A clear implication that there is a finish level for a property that's appropriate for tenants who come and go and a higher level of finish for owners who are planning to be there for a while.

Just for example, a Formica counter top is sturdy, easy to clean and does the job just fine.  If its damaged, it can be repaired or replaced for minimal cost.  A granite counter top requires twice a year thorough cleaning and resealing.  That's a lengthy, tedious job.  If its not done, the counters absorb odors and stains.  No security deposit is going to cover the potential damage that could be easily done to a granite counter top.

Its not that tenants don't deserve granite counter tops.  Nobody deserves granite counter tops.  Owners are willing to pay the extra cost and do the extra work.  Most tenants are not.

Jon

Andy Parsons · Answer

I live in san jose bay area and just had my landlord raise my rent again,

second time in 3 months this time its another 10% raise, ive decided im going to move to a cheaper place while i save money and repair my credit so i can buy my first property.

was just curios what the market will do. I have been there 3 years and take care of the place. figured id ask.

Richard Warren · Answer

In most of those areas rental demand will increase causing rents to rise.

8)

Jon Holdman · Answer

Not sure we're yet seeing much increase in rents, but we're seeing falling vacancies.

Jon