Property Management
Rental Price Increases by Landlord
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Rental Price Increases

Opinions by the RE/Sys Broker

Winter 2006-‘07

The real estate market for rental prices has stayed relatively level after the momentary increase during the early part of 2006.  The number of homes for sale impacted the rental market heavily in early 2006.  Many homes were being put on the sales market in hopes of catching the higher prices.  However, the late-comers to the sales market languished on the market and did not sell.  With record numbers of homes listed for sale many of the unsold became rentals and began to flood the rental market.  Rental prices softened and add in the holiday season we have a somewhat soft – somewhat normal market right now.

Sales projections for the end of the year 2007 are very optimistic.  Experts believe that we may have a SHORTAGE of homes for sale.  New home builders have cut back on building heavily.  The excess resale homes should be absorbed in the next 3 quarters.  The Las Vegas economy is still growing strong and lots of people are still moving here.  The end of the year looks promising.

On Raising Rents – Be Careful!!

No tenants regard a rental rate increase positively.  When a landlord raises the rent, the tenants get upset and will sometimes want to move out in retaliation.  That’s a normal reaction by anyone whose fees have increased.  Try not to lose your GOOD tenants because of rent increases.  If your property goes vacant and you lose income be aware that the cost of vacancy, lost rent, cleaning, advertising, leasing commissions, utilities, shampooing, painting, etc. add up to MORE than a minor rental increase.  Think about this, if you lose a tenant while attempting to receive $50/month more, it will take more than 4 YEARS to BREAK EVEN from a $2,500 vacancy expense.