It’s tough out there, but looking to 2012, landlords are optimistic, according to a recent Rent.com survey of property managers representing approximately 29,000 apartment communities.
The Vacancy Economy
Job market conditions remain the greatest factor in determining vacancies. In 2011, just 52 percent of property managers reported job loss as a significant factor affecting vacancy rates, down from 70 percent last year and 90 percent in 2009. Beyond that, 46 percent of property managers said vacancies were affected by tenants who could not afford their rent or were trying to save more money, down from 59 percent the year before. Just 23 percent of property managers cited tenants doubling up or taking on roommates as factors driving vacancies, down from 48 percent in 2010.
The Concession Stand
The number of property managers offering concessions to attract renters also is on the decline. Twenty percent reported reducing deposit amounts (versus 44 percent in 2010), and 16 percent of property managers are still willing to lower rent or provide one or more months’ rent free as a concession (versus 37 and 36 percent, respectively, in 2010).
Property managers continue to see year-over-year declines in creditworthiness among prospective applicants, with 43 percent citing a decline in creditworthiness in 2011, down from 53 percent in 2010 and 78 percent in 2011. An additional 43 percent say creditworthiness has remained flat, with 14 percent citing an uptick.