Should you sell or rent? With an average of 10 percent year-over-year residential real estate growth, it’s worth considering selling. Equally, the rental market, rocked by the pandemic shortages is nurturing unprecedented demand. Either way, property owners and management services remain (very much) in demand.
What happens when people telework instead of commuting? Home spaces have become more valued. People are bored. However, they must entertain themselves over long intervals inside your rental property.
The actual square footage matters just as much as the property’s geographic location since people are forced to spend 24 hours a day (every day) indoors. Yes, they are looking to improve their current situation, and this means the rental market is also in play.
A hot residential market also creates a demand for home improvement. Visited a Home Improvement store lately? The local news reports on shortages of grocery items, but fails to mention that unprecedented waiting lists and price increases in light-construction or handyman services. As I write this column, I am on a 3-week waiting list to have a professionally installed tack-strip in a recently renovated space. Baron advises new property owners to perform repairs themselves. Absent this, obtaining 3 quotes from vendors prevents overcharging (although in a hot market, your costs will increase due to high demand and scarcity).
This trend places a premium on homes with bonus features such as
* cleverly designed interior spaces
* fast and reliable internet service
* rooms with natural sunlight or painted in lighter shades
* landscaping or home-gardening opportunities
* clean and highly functional bathrooms and kitchens (for reasons mentioned above)
A new trend worth watching is online home shopping. Social media posts inadvertently make people fear they are missing-out if their current home is less-than-perfect. This discontent fuels the rental market as well. Your rental’s extra should be displayed prominently, in text, and in photos to attract millennial lessors.
Takeaways from an overheating residential market
Refinance as rates remain low
Avoid tenant turn-over as your time and costs to re-tenant will be high. (Consider a longer lease term, government stimulus may help avoid eviction)
As more tenants enter a high-demand rental market (in a soft economy), screening becomes imperative
If you have a turn-over and refurbish the unit, considering the ‘now’ and ‘future’ market, pass along turn-over costs to the new tenants.
If you sell or cash-out your property, be prepared to wait until market conditions change
As always, Baron welcomes your comments and contributions. Thank you.