Fall is upon us and we frequently get calls this time of year from owners in a panic asking us if they are “too late” to rent their property.
My answer to owners is of course “No!” Rentals happen all year long, but yes you will need to be more flexible and consider dropping your rental rate from the peak season rates. You will also need to consider being more negotiable with terms other than price, such as pets, utilities, occupancy limits, and lease duration. The summer months are naturally on the top of the bell curve for prices since that is when the maximum activity occurs. Econ 101 kicks in when the demand drops. Owners need to adjust their prices down to account for the reduced demand. In general, owners can expect about 10% -15% less in the slower months versus the peak months.
On the surface the answer to the owner’s question may seem pretty obvious, but as I dig deeper into the psychology of their question it occurs why they are in a panic. Most owners are caught up in the sales concept, which has big consequences for minor fluctuations in price. Unlike selling your property which is usually a life changing event, and worth some forward planning to maximize the sale price. Rentals have far smaller consequences. Selling a property with a 10% price fluctuation translates into tens if not hundreds of thousands of dollars. Most sellers who wait until the fall really have their work cut out to obtain top dollar. Luckily with rentals the total stakes are far lower, a 10% fluctuation in rent is a much smaller loss. The good news is that the reduced number of residents is also offset by the reduced amount of inventory. This helps level the playing field once again for owners. Properties in nice condition that outshine their competition are many times able to rent for close to peak rates. The bad news is that if your property needs work and doesn’t show well, you will most likely have to get it fixed up to compete with the limited prospects or reduce your rents far enough to lure someone to your property.
All of this is good news to savvy residents who are lucky enough to have the flexibility to lease during the slower season. Avoiding the peak rental season is a fantastic way to secure great housing at reduced prices. Residents can avoid the frantic rush of having to sign a lease quickly if they like the property, and they are more likely to find a negotiable landlord. Retirees and single professionals fit perfectly into this category. Most retirees and single professionals are not concerned with school districts and have more flexibility with unique living situations. In addition, most retirees are not concerned with proximity to commuting arteries. As a matter of fact they probably want to avoid these areas since they are more expensive and more crowded. Renting is a growing trend among retirees who are seeking to live near friends and family for a portion of the year, to avoiding the headaches of maintenance and yard work, and following the nice weather. If you are going to be renting for a few years and have the flexibility it makes perfect sense to avoid the rush and wait for the slower season to find a gem.