For many of our partner schools in Canada and the United States, there has been a substantial increase in demand for rental housing, whereas the supply has continued to remain low.
A significant increase in real estate selling prices in most markets has made it difficult for entry-level buyers to get into the market, very enticing for Baby Boomers to sell their homes and investment properties for retirement planning, and others simply tempted to sell unexpectedly for a great payout. This makes for a larger percentage of tenants searching for rental housing. According to the Pew Research Center, more U.S. households are currently renters than at any point since 1965. A survey states that a third of today’s renters rent by choice, not circumstance.
There are two types of rental markets:
A landlord’s market is characterized by low vacancy rates, coupled with steadily increasing rents, resulting in a market that heavily favors landlords. Landlords generally see increased profits and little to no difficulty finding tenants.
A tenant’s market is the opposite. It is typically characterized by high vacancy rates, declining rents and an overabundant rental supply. This type of rental market is in the tenant’s favor, as they are often able to easily secure highly desirable rental accommodations at a lower, more competitive price.
So, what exactly is a perfect landlord’s market?
Generally, a perfect landlord’s market is beneficial for landlords for the following reasons:
1. Less difficulty securing tenants.
As conditions recover from the COVID-19 pandemic and life returns back to normal, most student tenants have returned to in-class learning and are searching for rental accommodations. With a low supply of rental housing for tenants to choose from, landlords have had a much easier time renting out their accommodations. This leads to increased security, as well as continuous rental income and cash flow.
2. Easier to find the ideal tenant.
Many landlords have experienced an increase in tenant inquiries, in comparison to previous years, resulting in a greater chance of finding an ideal tenant. Even in a perfect landlord’s market, a landlord still wants to find a tenant suitable for their rental unit, agreeable to rental conditions and compatible to existing tenants. A suitable tenant can save the landlord repair costs, time and continue to appreciate the rental property.
3. Reduced costs and time spent negotiating.
Many landlords have needed shorter advertising durations to secure a tenant, as well as experienced reduced negotiation with potential tenants regarding rental rates and additional perks or services included in the rental price. Some landlords have signed leases within 24 to 48 hours of listing the rental.
4. Increased tenant renewal rates.
When vacancy rates are low, tenants are more likely to renew the lease subsequent years, rather than trying to compete for another rental accommodation. Tenant retention saves time and reduces costs for landlords.
How does a perfect landlord’s market affect student housing?
These market conditions make it difficult for renters to compete for the few rental accommodations available. Student tenants are encouraged to look at rental opportunities outside the typical student housing units, such as hotels offering rentals by the month or shared accommodations.
In addition, Places4Students.com has been reaching out to residents in the communities of our partner schools to encourage anyone with a spare room to consider renting it to a student. This is a great way to develop extra income and support your community!
SEE ALSO: Ever Considered Renting Your Spare Room to a Student?
The Places4Students.com Team