Rentals in Bend. What has happened??
Recently, I received a call from a tenant asking to renew their lease for another year. As a small, boutique real estate company with approximately 60 rentals, we are very “hands on” in our approach to management. As such, our rentals rarely become vacant. We enjoy working with our owners and tenants alike and try to keep everyone happy and things moving along peacefully. So, of course, we wanted to renew the lease.
The next question though stirred some interest. They asked if they could reduce their rent as they’ve been good tenants for the last several years. Reduce? I can understand asking to stay the same and avoid an increase, but to reduce?
Here’s a bit of what’s going on in the market today. Did you know our real estate market went over a cliff 5 years ago? Yes, it did. In 2008. When that happened, not only did many people lose their homes, but many property owners looked to the rental market as a way to see them through the downturn. They rented out their properties, many at a huge loss, waiting until the market recovered enough to sell.
While the majority of unintentional landlords ended up losing their real property through foreclosure or short selling it, we still have many investors that weathered the storm and still own rental properties; often still feeding it monthly.
Happy New Year 2013! In January of 2013, we all awoke from the holiday celebration and noticed that market revival that started in the previous year was kicking full steam ahead. Within the first quarter of 2013, median sales amount had appreciated by 28% placing it at $250,000. That sparkle was coming back into the eyes of many in the industry.
May 2013. My tenant asks to reduce their rent. At the same time right here in Bend, we have a couple who contacts me asking if we have any rentals. Something $1,300 or under. They’ve called all the other companies in town, looked on everyone’s websites and watch Craigslist with a religious zeal. They’ve applied for 4 different properties and are the 5th applicant being considered on one property and the 10th applicant being considered on another. They’ve been beaten by others who can move in the same day. They applied within hours of those properties being listed. Their credit score is perfect and any other time would be considered the perfect tenants.
I called an owner I know that manages their own property thinking I would get them in with him. Sorry, he tells me, he just listed the place on Craigslist 2 hours previously and already has 20 emails and his phone won’t stop ringing. He’s shutting it off.
I’m getting calls and emails from other tenants asking to renew their leases months ahead of time because they are terrified of being asked to leave at the end of the lease and wanting the security of knowing they won’t be stuck looking in this market.
The question as to “Why is this happening?” It’s the sales market. Unintentional landlords are selling their properties and many of them are going to first time home buyers. Bye-bye rental property.
In November 2012, there were 181 new residential listings for sale in Bend. In April 2013, there were 400 new residential listings for sale in Bend. Of these 400 new residential listings, 151 were under $250,000. The single family residential market. Several of the rentals I manage were sold within the last couple months alone.
So, back to the question my tenant asked, “Would the owner consider reducing the rent? “
Rents have increased across the board. For their particular property, rents have increased by $200 per month. Keeping the rent the same would be generous. Reducing it? No way.
In fact, after reviewing the market, I contacted many of our property owners recommending a rental increase. My next task? Sending out all the rental increase notices.
Seriously, it’s a good time to buy a rental right now. Not so great to be trying to find a place to rent in Bend.
If you have any questions or wish me to take a look at the rental value of your property, please call me at 541-350-1795 or send me an email at email@example.com.