You won’t see much of this sign in 2012. The apartment market is officially a “landlord’s market” with the national vacancy rate expected to fall to 4.6% this year, according to REIS, a commercial landlord research company (analyses’ 40 units or higher projects). This translates to rents will continue to rise in 2012 and beyond. What a great time to be an apartment investor.
The vacancy rate was 5.2% in the fourth quarter of 2011, down from 6.6% in the fourth quarter of 2010.
There is an overall trend away from home ownership and downsize for value. In Fannie Mae’s fourth quarter National Housing Survey 48% of renters said they can’t afford the purchase or upkeep of a home and 47% said they don’t have the credit to qualify for a mortgage.
In a recent survey of visitors to landlord rental listing site, Apartments.com 33.6% of those looking for an apartment this year are previous homeowners. Also, as the economy improves, more young workers will have the income needed to move out of their parents home and on their own and into a rental.
Obviously, some rental markets are tighter than others. New Haven, Conn., had a vacancy rate of 2.1% in the fourth quarter and New York had a rate of 2.4%, according to REIS data. These markets are essentially at full occupancy, as you can’t maintain 100% occupancy with normal turnover.
Nationally, average advertised one bedroom rents have gone up by 4.1% between March 2011 and March 2012. But rent hikes in more competitive markets have been much steeper. The average one bedroom rents in Chicago are up 11% from 2011, Denver is up 12% and Charlotte is up 13% from last year.
While tight conditions will cause many current renters to stay put, there will also be people who are forced to move because they can’t afford the rent increase. Those renters will downsize to more affordable apartment living.
Today’s Apartment Market will change your life…
If you want to profit in today’s apartment market, owning just one right project, in the right market at the right price, will literally change your life. Imagine buying one project a year, for the next 5 years, living handsomely off the income. Now imagine what your net worth will look like after you sell them.
Do you expect these low vacancies to last? Let me know below…
Learn to be an Apartment Landlord
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