The Las Vegas rental house market is on the move again. We are in another transition phase where home rental prices are dropping slightly. Consider some facts:
1. With over 21,000 homes (10,000 a year ago) listed for sale on the MLS many will not sell and will become rentals. More rentals equals more supply of homes and more competition.
2. The rental season is slowing, the summer rush is over, fall is slower.
3. Apartment rates are increasing about 1.5% each quarter. Supply of empty apartments has dimished due to the condo conversion craze. These conversions took over 90 apartment complexes out of the market into buyers hands. Consequently,condo rentals have been good and steady.
4. The Summer of '06 has been the best rental house market ever, yet beware of the slowing demand by tenants. Landlords still have rental prices high and the demand is cooling. The school year has started so the tenant's mad dash to get into the proper school zone is over.
The rental season in Las Vegas never really ends. It ebbs and flows. Our city has an almost constant supply of 5,000-7,000 new residents each month. Additionally, existing tenants move up or move down in stature. Since most of them cannot afford to buy in this new higher-priced home market, most are forced to become or stay tenants. They either rent houses or apartments. The supply of tenants is constant and somewhat predictable. The supply of rental houses is not.
Now, Fall '06, we are getting more properties to rent because the once hopeful sellers have now realized that they will not sell their homes at the price they desired. Many of these unsold homes do not have the income to pay the mortgages. They are forced to either (1) leave it empty, (2) let it go into foreclosure, or (3) rent it out. The choice is obvious, rent it.
Advise to landlords. You have lots of competition. Try to get your higher rental price but if you don't get immediate reactions from tenants don't waste time, lower the price until the phone rings!! You can allow pets, include appliances, reduce deposits required but nothing gets the tenants attention like a lower rental price! Our most successful landlord always gets the rental comps for his empty house, then he sets the price $50-100 lower than the comps. He gets his houses rented fast!! Cash flow is king and he is the cash flow king. Learn from our most succesful landlord on how to reduce vacancy and increase income.
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