Atlanta Rental Market Update
The Atlanta Rental Market has undergone a very large shift. Rental rates are dropping significantly – $100 – 200 over market rates of last year. Vacancies continue to rise. More tenants are renewing their leases, but often are asking for rental concessions and getting them due to the competition in the marketplace. We are finding houses with 4 bedrooms or more are typically renting faster than our 2 & 3 bedroom properties.
All properties need to be in excellent condition & priced correctly to rent quickly. We are recommending that owner’s update any dated fixtures/lighting, make it look and smell its best, as well as provide incentives for on-time payment. We are also suggesting that owners consider putting some inexpensive staging items in the home like colored shower curtains with matching towels and candles. This increases the emotional response and seems to have a significant impact for approximately $30-45.
As the rental market is very volatile, we are constantly evaluating our rental rates. Unfortunately with reduced on-line advertising alternatives (Rentals.com has bought out most of the smaller more cost effective sites here in GA), we are finding rental comps to be more and more challenging and not as consistent as they once were. In addition, on-line advertising costs has significantly increased, while traffic has decreased. All of this has impacted our ability to attract higher numbers of inquiries.
On a positive note, the applicants that we are getting are slightly better candidates than those of a year ago. We are easily getting double deposit for more risky tenants. It appears that one of the reason for the increase in demand for larger houses is we are finding more and more multi-generational families are applying together. It will be interesting to see how long this trend continues.
For the smaller homes, the competition has always been apartments. Below is an excerpt from another real estate agent that specializes in Multi-Family dwellings – Dale Henson.
“At the end of 2008 average occupancy in all garden apartments in the 11-county market area was 8.6%, down 250 basis points from 91.1% at the end of 2007.”
“The fundamentals of the Atlanta apartment market will very likely not begin a positive turn before mid-2010 or early-2011”
“[The large number of new apartments coming on the market that were started in 2007 & 2008] coupled with a decline in demand due to economic conditions, will push occupancy down to 87% at best by the end of 2009.”
What this means for you and me as investors/owners is that it is going to take some time for the market to turn. Rents will continue to be soft and we will have to become very aggressive in our approach to this issue.
June 17th, 2009 at 8:32 pm
I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.
June 18th, 2009 at 6:18 am
Thank you Sue! Anne