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If your tenants are anything like the average American renter, they probably have a few misconceptions about renters insurance. According to a recent Daily Finance article, there are three main reasons tenants don’t think they need insurance.
As a landlord or manager you can do a lot to provide your tenants with information to dispel these misconceptions. Have you heard other excuses for not buying renter’s insurance? Tell us your stories on Facebook, Twitter or through the comments below!
With the Seattle housing market still suffering and vacancy rates hovering just below 5%, multi-family rental properties never looked so attractive! Rental rates will continue to increase, following a national trend, until apartment construction projects can be completed to meet the large demand.
This demand for rental units is being driven in part by a young generation that, as they get hired to new positions, are looking to leave their parents basement and move out on their own. According to a recent article in The Wall Street Journal, “still other renters have no alternative. Some 2.8 million homes were foreclosed on since 2008, with another 5 million expected to enter foreclosure or be repossessed by the banks by the end of 2012, according to RealtyTrac.com. Many of those former homeowners will have to rent until their credit score recovers, which typically takes seven years. ”
So what should investors who want to enter into the rental industry be looking for?
It’s essential to find a property where rental rates can be set high enough to cover the cost of operating costs such as repairs and utilities, even when a few units are vacant.
Investors should also be aware that buying a multi-family rental property is a long term investment, with the greatest return arriving 15-20 years after the initial investment. But now is a great time to invest because the strong rental market now (which is predicted to be strong for several more years) will offer an initial boost on the investment.
Are Seattle apartments out of reach? According to a recent release by the U.S. Department of Housing and Urban Development, yes they are. Just a year ago the average renter could manage to rent a 1 bedroom apartment in the Seattle-Bellevue area. This year the average renter can only afford a studio.
This decrease in affordability is caused by a decline in the job market paired with an increase in vacancy rates. According to the Seattle PI, renters are earning 5.1% less than they did last year and rental rates have risen 11.3%. Renting a 1 bedroom apartment while working a minimum wage job would require working 87 hours a week.
And it’s not expected to get better any time soon for renters. With demand for apartments outpacing supply for the next year at least, rates will continue to rise throughout the city.
For more information, read the Seattle PI article here.