Despite all the hype in the news, the rental market is not what it was a year ago. Although it’s still strong, we are definitely seeing a softening overall. The single biggest reason is the glut of “luxury rentals” hitting the market within the past year. While many of these complexes are quite pricey, they also offer amenities that single family, townhomes or condos simply don’t have. In today’s market, it seems that tenants are amenity driven. The lure of a rooftop patio and pool, surrounded by luxurious chaise lounges, community bars and high tech grills, with stunning views of the Colorado mountains and gorgeous sunsets is the siren call that many find irresistible.
Gone are the days of putting a house on the rental market and having 10 qualified applicants within the first hour. Gone are the days of tenants trying to outbid every other tenant, offering more money and more security to the landlord. Gone indeed! Tenants have so many options that they can afford to be more deliberate in their choices.
Before you all rush to install rooftop pools, consider some of the positive aspects of the current market. High-rise apartment living is not for everyone, job growth is still strong and with the likelihood of rising interest rates, the lease versus buy scenario should keep the rental market fairly robust.
Here are the things you should know if you are a landlord or considering becoming a landlord.
- Plan for more days on the market. In general, we are finding it takes six to eight weeks to secure a tenant.
- Price it right the first time. Many landlords want to start at an unrealistically high number. In the past, this was not a bad strategy. But now, if you start high and keep lowering, you create the perception that there is something wrong with the property.
- Create a space that is inviting but somewhat generic. New carpet and new paint can go a long way, but if a house is too personal, it will have a negative effect. The purple princess bedroom that enthralled your daughter 10 years ago will not have same appeal to a potential family with all boys.
- Consider curb appeal. The first impression is the lasting impression. No matter if a tenant sees the property on the Internet or as a drive by, a yard that is overgrown and not cared for will be an immediate turn off. In one instance, we had potential tenants refuse to come in once they saw the yard, even though the inside was very nice. A landscape overhaul did the trick! Now the property is continually leased.
- Comprehensive tenant screening is important! Keep in mind that these “luxury rentals” have a very tight screening process and not everyone can qualify. That means that tenants with questionable credit or background are looking elsewhere. A good property management company knows and understands the importance of tenant screening.
- Consider offering perks. Many tenants are willing to pay extra for such amenities as lawn care and snow removal. Landlords should also weigh the benefits of paying for water, sewer and trash. Again, a property management firm can advise you of the risks/rewards of these types of services.
- Location, location, location. This speaks for itself and cannot be overstated!
At InTransit Properties, we’ve seen many changes in the Denver rental market over the years and make sure our clients are aware of the latest shifts to help ensure that you get the best tenants for your space. Contact us today for more insight into the current Denver rental market.