Atlanta Rental Market Update – Vacancy Rate
Mark and I read a lot about what is going on in the real estate business and in politics. We do this so that we can digest the information and figure out how we can use the trends to assist our clients. Earlier this month, we read that the vacancy rate is at an all time high for the past 20 years. We are at a national average of 7.5 percent and the highest recorded is 7.8 percent back in 1986.
While I have not received new vacancy rates for metro Atlanta, the rate was 6.3 in an article I read from April 2009. I would guess that number has increased. So what does this mean for you and me? It means that because the competition is at the highest rate we have seen in decades, we have to get smart and aggressive with our marketing efforts.
At this time, none of our 2 bedroom homes nor condos are getting rented. Why should they when people are giving away 3 bedrooms for what 2 bedrooms used to cost? If you have a 2 bedroom like I personally do, then I recommend that you lower the rate and have it in great condition. We personally will be renting a two bedroom house less than our cost just so that we don’t have to pay for a vacancy insurance policy, utilities, and risk damage due to vandalism. Some cash coming in is better than no cash coming in.
I have been saying for a while that if you currently have a vacancy, you need to consider what you can do to as far as concessions. Also, if you currently have a tenant in the property and the lease is coming due, be prepared to make rental concessions to keep them in the property. The reality is your neighbor who has a vacancy is probably willing to give them concessions if you aren’t. We are seeing a lot of move in specials, rent reductions, free rent and other incentives out there in the market.
We have had success with offering discounts if paid before the first. We have not had as much success with offering incentives like free stuff (flat screen TV, etc) with rental.
Raising the co-op to another agent has worked some as well. We have some investors that agree to raise the co-op. The great part about that is you only pay that if the tenant was brought by another agent, but we have seen viewings increase when that happens. While it will not make someone rent your property if they don’t like it –the increase in showings means that you have more opportunity to rent your home faster. As more and more agents are not having as much success selling house, they are turning to rentals to keep their business going. Two years ago, agents would not have wasted their time showing a rental, but today a large majority of our calls are from agents looking to place someone for some fairly quick and easy income.
All this to say, if Solid Source PM manages your property and you have a vacancy, evaluate your bi-weekly activity report. If you are not receiving 3-5 showings, then the price needs to be corrected to increase the traffic. If you are getting showings, but we aren’t getting applications, we need to find out what we can do to increase the conversions to applications. Is there something that we can fix with the home? Are we getting applicants, but they aren’t qualifying. Some of these issues we can fix, others we can’t but lets work together to see what we can do to get these filled.
July 24th, 2009 at 3:44 am
Thanks for posting about this, I would love to read more about this topic.