The COVID-19 pandemic strikes again. The housing market roared one year ago. Now weakness shows. The rental market (specifically, the demand for housing and the amounts charged by owners) followed this trend. At year’s end, demand for single family long-term rentals — while still at historic highs — appears to be slowing.
What quick gauges should one measure the inflation?
- Zillow’s rental prices on listed homes usually tracks with the 30 year fixed rate for 80% of the homes value.
- Another good index can be seen in the the 10 year government bond interest rate, which at the writing of this page hovers near 3.5%.
For lease renewals a virtuous landlord should also consider the benefits of retaining their current tenants. At the very least since the make-ready costs closely follow the economic trends: labor shortages, longer wait times for products, higher product and delivery costs.
In closing, before you as the owner take advantage of the generous increases your unit may allow at this point in time, you may wish to consider the softening economy, the heady ‘steam’ in the rental market and the time factor needed to turn your property to a new untested tenant.
One more piece of advice. Check to see whether or not rent control might limit an increase in your higher price. The one for Florida is listed here.
As always, feel free to hit Baron with any comments.