As we’re sure you’ve noticed, we’re currently going through a confusing period for housing, the economy, and business in general. Many economists are predicting that housing bubbles will burst in the near future, which means we may see homes lose value. More importantly for renters and landlords, however, is the National Vacancy Rate and what that means for rental housing.
In December 2016, the US Rental Vacancy Rate was 6.90%. For comparison, the long-term average is 7.37%, and in 2009, it was as high as 11.10%, the highest since it’s been recorded. What does that mean, exactly? It means that currently 6.90% of recorded rental inventory is vacant and available for rent. Lower numbers mean that there are fewer units available, and higher numbers indicate more units are laying vacant. The high numbers from 2009 occurred at the height of the Great Recession when many people were going through financial and housing crises. Since 2009, the vacancy rate has fallen steadily for several reasons.
Protect Yourself and Your Business
As the economy began improving, more people were able to afford housing. Additionally, however, the price of homes steadily rose, making home ownership an impossibility for many. Renting became either the only affordable housing solution or the preferred solution to those who wanted to save money or live in a more desirable area. With the vacancy numbers currently so low, it’s good news for landlords because it means that rental units are in high demand. As housing bubbles teeter precariously with the possibility of bursting, it can mean different outcomes depending on your area. If homes lose value and financing goes down the drain, more people may turn to rentals for their housing, which means business will be good. If the bubble bursting comes with another recession, that could be a problem. People in tight financial straits may look into more creative solutions for housing, such as moving in with family or squatting on a friend’s couch. Unfortunately for landlords, that means more vacant rentals, as indicated by the Great Recession.
To protect yourself and your business, we recommend that you screen perspective tenants in order to make the best choice. A good candidate will have steady income, no history of eviction or missed payment, and good credit. Even if the housing bubble bursts and we see another recession, you should make sure to select a candidate with a good history and staying power through tough times.
To better help you make the right decision, try our RentalConnect program, which offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search. Reach out to us for more details!
Landlords Property Managers Contact TSCI