Although rental news is not typically a topic I cover here I think it is a relevant topic, in light of all the investors who are purchasing income properties. I was curious to get the perspective of someone who is right in the center of the rental market, so I called my colleague Lee Arnold of Chamberlain Property Management, a property management company in North San Diego.
Established renters: Although landlords can effectively raise rents, and will still be able to find tenants (properties are still renting rather quickly, often with multiple applications submitted right off the bat), it costs the landlord to turn over units. On average it could amount to $5,000 in lost rents and vacancy time, and to prepare the property for the next tenants (repairs, painting, etc.). Many landlords have opted to forgo raising rents for the time being, in lieu of keeping the tenants they have in their properties.
New renters: Expect to see new rentals priced a bit higher than current tenants might be paying for similar units. In other words, if you are already a renter there is a good chance your rent may not go up, but if you are looking for rental property you may encounter higher prices. The higher end rental market is the only one not going up right now, and according to Lee Arnold that is likely because of people reassessing their goals. Higher-end rentals include those over $3,000 a month.
Another interesting fact that property managers are seeing is that 2 bedroom units are not renting as quickly as 3+ bedroom units. This is due to the smaller size of the two bedroom units, comparatively speaking.
If you are looking for a property to rent you may want to speak with a mortgage broker to discuss you budget and loan options. If you plan well, you may be able to purchase a home and pay less per month than you would pay in rent. Many recent articles have shed light on the fact that renting can be more expensive than buying, so make sure you are informed before you make a choice!