Rental Market Update January
Rental market update January 2022. That’s Shana Acquisto, she’s a luxury real estate broker. She has certain feelings on rentals and I have different opposing views on that one. So we’re going to talk through it.
But we have compromised.
Yes. And on this, we’re going to talk about the effects that this is going to have on first time homebuyers. We’re going to talk about where rents are compared to what they were in twenty twenty one, maybe a year ago, where we think they’ll be in the future going on and how you could take advantage of this opportunity.
And what does it mean to you as a realtor or your clients? Yeah. All right. So let’s dive in. Let’s specifically start with an article that is mentioned here.
So we’ll be fact based and we’ll chat this link into you and we’ll have Omkar. Share it on the screen for us.
Yeah. So in talking with that, I have someone I know that is renting an apartment in Frisco, OK, and she’s been there for two years. Yes, and her rent is going up as of January, actually February, I think to feel it’s going up four hundred dollars a month.
That is huge. That will I mean, that’s a deal breaker for a lot of people. So you want to stay in the same place, but there’s no cap on what they can do as a landlord.
While the property values have went up so substantially right then and your costs and inflation, I guess, and and taxes, right? So that’s something to think about. If somebody is rent is going up that significant, I feel like it’s a time for them to consider purchasing right.
You should consider getting pre-approved and see where you are, and then it brings up the affordability. Where can I afford something at this price? And we’re going to talk about that for an hour in our agent meetings today. But there are places you just have to change your mindset and expand your search.
Yeah, and get in your car and drive further. Yeah, it’s about what it comes down to. Yeah. And the issue here is that home prices have went up, right. So now rental prices are going to go up as well. And imagine all the people that want to be first time homebuyers, but have to put this off because they can’t afford and they can’t pay over market price.
So it’s creating this huge glut of all of these different properties. And yesterday, we talked about how a lot of the eye buyer programs are selling their homes specifically to institutional investors who are then renting them out and playing the longer term gain or longer term game to rent them and wait for appreciation and for them to go up in value and then for them to sell them long term.
So our son Tanner is moving. He lives in Manhattan and he is changing apartments, right? And there is a law there that the landlords, if they I mean, not everybody does this, but they get like an incentive for doing this, that they won’t. There’s a cap on what they’ll raise the rent so the people can stay in the rentals longer.
But, you know, even if I’m fundamentally opposed to that, someone cannot afford to purchase, then you have to explore, where are these rentals that they can afford, right?
So yeah, that sounds like some real liberal stuff that’s going on there in New York City or other places where there have rent controls and the government’s involved and telling you what you can and can’t do. Not exactly what I’m interested in, nor what goes on here in the state of Texas.
Right. But there is, I mean, going up four hundred dollars a month, that’s huge.
But well, as a homeowner, I want to make sure that I’m able to maximize exactly what my property is worth and not have somebody else tell me what I can or can’t do with it or what’s going on right? If I’m if I own the property right and I invested the money and own it.
Why would a different person tell me what it should be based on? You know, all it feels right for that, but it’s home.
You know, you have appreciation. I guess in the same sense, you can’t go back and say, you shouldn’t be charging this. You shouldn’t be listing this home for this. It’s not, you know, it’s not right. It’s gone up by twenty six percent or whatever it is, and it
Holds down the value of property if the income from it can’t go up in lockstep with what the true market value is.
But the bottom line is we’re seeing a lot of change and a lot of people who live in our area may be priced out and have to expand and go out. And, you know, maybe this is where you can step in and offer assistance.
Yeah. Or specifically, if you now know about this situation, you can be proactively reach out to people and say, Hey, let’s instead of waiting till the time when everyone else is going to move in May, June, March, right when in the spring. Let’s get on it now and have you try to buy a home now rather than later and preemptively do this?
And Tanner specifically started looking at moving because one year ago the rental rate was going to be less if he moved and locked in a rate.
Yeah. And then all of a sudden it’s like, Oh, he didn’t need he any way out of the lease. And does it? And I’m like, That’s kind of like a risky proposition. Yeah.
But you know, it is what it is. And now it’s it’s significantly more and it changed to where they were able to move.
So he changed locations. Yeah. And now he lives in Harlem.
True story. But it’s nice, you guys. It’s the better part of Harlem. Ok, so just just think about that for a minute.
Far from where he where he was originally by Columbia.
So if your child ever tells you that they’re moving to the nice part of Harlem? And you can keep a straight face, then I’m proud of you.