Rent Down, Vacancies up in Tennessee
In the last year, rental rates have plummeted in the Chattanooga, Tennessee area. I have 5 rental units and just about every one of them is renting for less than it did two years ago. A property that I used to rent for $625 a month just rented out for $550 a month. The economic downturn has really hit the landlord in the wallet.
When the housing crisis first happened I figured it would be a boon for landlords. After all, with family homes being foreclosed on and credit being tightened, people would have to live somewhere. This has not played out how I thought it would. I have talked to several other landlords in my area and they are all experiencing the same results. The conclusion that I have come to is that people are moving back in with their families. A lot of newly graduated students, recent divorcees, and singles must be moving in with friends and family members.
Last November, when the financial crisis first happened I held firm to my guns and did not drop rent for 6 months on my $425 unit. I had been getting $465 for two years and did not want to take a hit. In April 09’ I finally gave in and rented to a strong tenant for $415. I was reluctant to rent at the lower rates and it cost me 6 months of rent.
Anybody else experiencing the same kind of results?
Comments (2)
I agree with you Michael. I think it's a great time to be a buyer. Prices have dropped and eventually things will turn around. The US population is growing and they have to go somewhere.
Michael Rogers, over 14 years ago
There is no doubt that rents are soft in my market as well. But from where I sit this is the short term blip as the market looks to reset itself. I expect rents to be soft most of 2010 but that should be the bottom for rents as people need a place to live and we have all but stop building low income housing because it is not profitable. So eventually supply and demand will catch up and rents will go back up. I am buying as much cheap housing as I can because eventually supply and demand has to catch up Good Investing
Michael Zuber, over 14 years ago