Tough times for owners, too
Everyone knows that the great recession has taken its toll on the market of the logement.Saisies have reached historic highs and we've all heard stories personal and devastating displaced owners.
There is a corollary market rental gets less attention: loss of employment and financial devastation discriminate and tenants have been severely affected by the economic downturn, too. This has led to changes in the behaviour of tenant as well as the fragile balance supply and demand on the rental market.
Rent.com, eBay (EBAY) company which provides tenants a free tool to search for tens of thousands of ads for rental at the national level, analyzed data from over 450 million in 2007 and 2008 research to get an overview before - after tenant behavior to the recession (remember the recession officially started in December 2007). Before the start of the recession, the average number of rooms that searched for tenants tends to decline steadily in the year, but after the beginning of the tenants economic collapse behaviour has shown a clear reversal of this trend. We hypothesize that tenants have been doubling-up or trade.
Vet in our theories, we examined trends keywords tenants use to find apartments in Google (GOUD) and our own internal data. Also, we conducted interviews with some of our larger clients - companies that manage rental properties. All evidence pointed out a doubling the trend and, in hindsight, perfect logic.Tenants looking more terms like "good apartments markets" and "credit bad apartments" and managers real us saying that they were due to tenants of losing their job, doubly with roommates or moving from home with the family weather the storm vacancy rates increase.
All of this consolidation household took his number free of charge on the owners of the apartment. Vacancy national rates climbed in 2009 and 2010, and apartment owners responded by offering more important concessions, by decreasing the rent and taking is plus.En 2009 Annual Rent.com property management , credit risk , 73% of owners and managers revealed that their vacancy rates were affected by the decline of the solvency of the tenants.When asked how they responded to this phenomenon, 43% said that they were actually lowering their credit standards to fill vacancies.
Our 2010 annual Property Management Survey, carried out this summer, we have identified that credit remains a major problem on the rental market.More than half (53%) of property owners and managers share credit tenants was affecting their occupation.Confronté this problem, 44% of landowners and managers have told us they reduced deposits guarantee to fill their vacancies, an increase of 35% of owners and managers who used this tactic 2009.
Today, the vacancy rates are stabilizing and further improve in some areas, but quality credit tenant is a bag mixte.Selon industry experts, the properties are approximately 3% of rental prospects more than last year's screening and less decline applications of tenant's credit quality.But then that applicants for class properties A credit notes and B (new properties in the most pleasant neighbourhoods with better equipment show improvements, applicants for class C properties (older properties in less desirable areas) credit memos pursue multiyear decline.
Interestingly, the properties of the class C know the greatest increase in the volume of candidates, as well as the effective rent growth.Our hypothesis is that tenants who have already applied to the properties of the class B more expensive are probably financially conservative either because they are insecure about their jobs or are newly re-employed and want to consolidate their finances after a period of unemployment.
As we have, head in the fourth quarter – also called slow season in the leasing industry-there a few things that can make the apartment operators who are not yet in the recovery of market apartment:
Collect a deposit pleased - reality of market can be that lift goods for occupancy administrators must accept tenants with lower lowspeed économique.Pour attenuate risk managers should require more security deposits because average default rates decrease with the largest deposits credit notes.
Intend to hire people with seizures on their record - those who have a mortgage foreclosure or mortgage payments are 90 or more days past due make up 9.2% of the candidates of the apartment, up to 7% was just 2 the same ans.Dans, they tend to be good tenants who pay their rent on time and over 70% of them usually "pass" their credit screening.
Reduce the deposit, but to make non-refundable-some operators apartment may feel that to remain competitive, they still need to apply lower security deposits at times more gras.Une how to mitigate the losses is to deposit not remboursable.Ce doing, operators can actually increase their effective deposits while remaining always competitive and filling vacancies.
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