rockin'robin
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Landlords Offer Tenants Reduced Rent, Concessions
Christmas will stretch into 2010 for apartment renters, who are benefiting from an epic collapse in the rental market and generous concessions.
Landlords are offering tenants up to six months of free rent, flat-screen TVs and new appliances. They're also slashing monthly rates and easing application standards.
Rents fell a record 3.5% in 2009 after factoring in freebies, according to MPF Research. MPF projects prices will fall an additional 2% next year as an improving housing market and a tax credit for first-time home buyers attract more renters.
"I've been at this 35 years, and it's by far the worst I've seen it," says Jeff Cronrod of the American Apartment Owners.
Association.
Nationwide, apartment vacancy is 7.8%, up from 4.8% at the end of 2007, says MPF Vice President Greg Willett.
The soft market is mostly rooted in the nation's 10% jobless rate. Tenants who lose their jobs are moving in with relatives or finding roommates, says economist Lawrence Yun of the National Association of Realtors.
Also, homeowners who want to move but can't sell their houses because they're worth less than their mortgages are renting them out instead. So are investors who snapped up recently foreclosed houses and condos and are waiting for the market to rebound before unloading them. Those units boost supply and dampen prices, economists say.
Among efforts to draw tenants:
•In the Charleston, S.C., area, Darby Development, which manages about 1,600 apartments, is offering up to two months of free rent, flat-screen TVs and $100 gasoline gift cards to new tenants, says Victoria Cowart, head of property management. Existing tenants can get big discounts off the first month's rent in a new lease.
"We're just trying to be a little unique," she says, noting vacancy at the complexes exceeds 20%.
•In Tampa and Orlando, Blue Rock Partners is haggling a bit with tenants, shaving rent to beat rivals, says managing partner Reuven Oded.
•In Seattle, Trinity Partnership, owner of 1,000 apartments, built a 24-seat digital movie theater in a 99-unit building it opened in May to stand out in a tough market.
•In New York City, Viking Management is paying brokers' fees, typically equal to a month of rent, for new tenants, says manager Tom Caraccio.
Despite the efforts, more than 5% of tenants skip out without paying back rent vs. a typical 2%, says Bill Gray, who writes a blog, The Landlord Doctor. About 3.6% of landlords defaulted on their mortgages in the third quarter, up from 1.8% in late 2008, according to Real Estate Econometrics.
Apartment Renters Win as Vacancy Rate Climbs - ABC News
Christmas will stretch into 2010 for apartment renters, who are benefiting from an epic collapse in the rental market and generous concessions.
Landlords are offering tenants up to six months of free rent, flat-screen TVs and new appliances. They're also slashing monthly rates and easing application standards.
Rents fell a record 3.5% in 2009 after factoring in freebies, according to MPF Research. MPF projects prices will fall an additional 2% next year as an improving housing market and a tax credit for first-time home buyers attract more renters.
"I've been at this 35 years, and it's by far the worst I've seen it," says Jeff Cronrod of the American Apartment Owners.
Association.
Nationwide, apartment vacancy is 7.8%, up from 4.8% at the end of 2007, says MPF Vice President Greg Willett.
The soft market is mostly rooted in the nation's 10% jobless rate. Tenants who lose their jobs are moving in with relatives or finding roommates, says economist Lawrence Yun of the National Association of Realtors.
Also, homeowners who want to move but can't sell their houses because they're worth less than their mortgages are renting them out instead. So are investors who snapped up recently foreclosed houses and condos and are waiting for the market to rebound before unloading them. Those units boost supply and dampen prices, economists say.
Among efforts to draw tenants:
•In the Charleston, S.C., area, Darby Development, which manages about 1,600 apartments, is offering up to two months of free rent, flat-screen TVs and $100 gasoline gift cards to new tenants, says Victoria Cowart, head of property management. Existing tenants can get big discounts off the first month's rent in a new lease.
"We're just trying to be a little unique," she says, noting vacancy at the complexes exceeds 20%.
•In Tampa and Orlando, Blue Rock Partners is haggling a bit with tenants, shaving rent to beat rivals, says managing partner Reuven Oded.
•In Seattle, Trinity Partnership, owner of 1,000 apartments, built a 24-seat digital movie theater in a 99-unit building it opened in May to stand out in a tough market.
•In New York City, Viking Management is paying brokers' fees, typically equal to a month of rent, for new tenants, says manager Tom Caraccio.
Despite the efforts, more than 5% of tenants skip out without paying back rent vs. a typical 2%, says Bill Gray, who writes a blog, The Landlord Doctor. About 3.6% of landlords defaulted on their mortgages in the third quarter, up from 1.8% in late 2008, according to Real Estate Econometrics.
Apartment Renters Win as Vacancy Rate Climbs - ABC News
