Oct 01

Landlords Should Tread Carefully Raising Rents

Landlords Should Tread Carefully Raising Rents

Landlords Should Tread Carefully Raising Rents

Landlords Should Tread Carefully Raising Rents

Low rental vacancies nationwide, coupled with continued strong demand for single-family rental properties, could prompt landlords to increase rents even more. But housing analysts caution that further rent hikes could overburden tenants, many of whom already are struggling to stay afloat financially as housing costs rise.

The nation’s largest landlords of single-family rentals, Invitation Homes and Tricon American Homes, say their occupancy rates have remained above 95 percent for the past three years. “Rent growth rates continue to be solid in most of the major markets across the country—in the middle to upper single digits,” Daren Blomquist, senior vice president at ATTOM Data Solutions, told the National Real Estate Investor. The firm’s data show that rents for three-bedroom units have climbed by 7 percent in markets such as Los Angeles and by 5 percent in Philadelphia in the 12 months that ended in the first quarter of 2018.

But landlords must not raise rents too quickly, housing analysts caution. Nearly 30 million U.S. renter households—or roughly half—already spend more than 30 percent of their income on rent, according to the Harvard Joint Center for Housing Studies. Most financial experts define that as “cost-burdened.”

With tight inventory putting upward pressure on home prices over the last few years, some economists have been calling on single-family landlords to cash out on their equity and put their properties on the market to feed lower price points starving for more listings. But many of these landlords say they have no intention of a sell-off anytime soon. Invitation Homes, for example, owns about 80,000 homes in 17 major markets, and company officials told CNBC that they see plenty of profit in the rental business. “U.S. housing is one of the most liquid classes in the world, and it’s a very easy thing for us on the margin to be buying and selling with our portfolio today,” Dallas Tanner, chief investment officer for Invitation Homes, told CNBC.

The single-family rental market is very healthy right now, says John Pawlowski, an analyst at Green Street Advisors. “The demand versus supply balance, and the operating outlook for revenue growth over these coming years, is more favorable versus most property types,” Pawlowski says.

Source:
“SFR Landlords Have Room to Raise Rents in Most Markets,” National Real Estate Investor (Sept. 24, 2018) and “Investors Finally Embrace Big Single-Family Rental Companies a Decade After the Financial Crisis,” CNBC (Sept. 11, 2018)

admin

For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.

Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.

Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.

When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.

For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.