The real estate market as a whole is heating up, and it seems like with each month, progress is made. Could that progress be reaching a tipping point – from a steady recovery to a full-on boom? For the property management market, that could very well be true. According to the Wall Street Journal, the rental vacancy rate nationwide dropped by half a percentage point to 8.2 percent in the end of 2013, better than the 8.7 percent we saw in the last quarter of 2012. Rental vacancy is the percentage of units that, at any given time, aren’t being occupied. Higher vacancy rates are indicative of weak rental markets, primarily because people are instead choosing to buy homes. But with the market of the last seven years, buying a home hasn’t been the easiest endeavor for many Americans. In fact, in many cities across the country, rental markets have been red-hot at various points over the past half-decade. That could be true yet again as the vacancy rate continues to fall and rental rates continue to rise. Case in point: the nation’s median rent for vacant units (the amount requested by the property management company) was $746 in December. That was 3% higher than the December 2012 amount, and that doesn’t take into consideration inflation. What is notable about this figure is that it is twice the inflation rate of last year – 1.5%. Renting, then, is increasing in cost at twice the rate as virtually everything else a consumer can purchase. For those interested in real estate as an investment opportunity, this presents a chance to tap into a thriving market. Rental units will continue to be in high demand and rates will continue to rise as long as there is systemic uncertainty in certain parts of the real estate market – and that, today, mostly includes uncertainty about the economy as a whole. Hiring a professional to manage your rental property is a key step in the process of tapping into this opportunity. Contact us today for more information.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.