Las Vegas Rental Market is Hot: Tips for Owners & Renters
Las Vegas has become one of the fastest-growing metropolitan areas in the United States, which is great news for real estate investors. The thriving economy and diverse population continue to attract new residents and businesses to the area.
Surplus of Seeker Renters in Las Vegas: Property managers dream (or nightmare?)
Something interesting has been happening over the last few months. My phone rang off the hook from prospective tenants desperately looking for rental homes in the Las Vegas and Henderson Nevada areas. Typically, this would be a dream come true for a property manager. The problem is, I haven't had a vacant property available to rent in two months!
When home and rental prices surge it's easy to focus on the positives, a thriving economy, great returns on investments, etc. It's important to remember that those positives come at a cost to many families.
During these transitional periods in real estate, it can be difficult to plan for the future. There are a few options to keep in mind whether you are a tenant or a property owner.
What caused the abundance of renters?
There are a couple of causes for the abundance of renters frantically searching for new homes. Here are the two main contributing factors to the surplus of renters.
Investors are capitalizing on high home prices
Rising home prices have enticed owners to cash out their investments and sell. As a result, there are fewer rental properties available on the market.
Rent on the rise
The competitive rental market has sent rent prices soaring, and owners are substantially raising rents to make sure they are maximizing the earning potential of their investments.
The Las Vegas Valley is experiencing a housing shortage, rents are high and vacancy rates are low. This has understandably caused tenants across the valley to live in a constant state of anxiety.
Advice for Tenant in Las Vegas: BE PROACTIVE
Whether you are thinking of making a change or love your home and want to stay, don't wait for your lease to expire or your landlord to contact you. Reach out to your landlord at least 60 days in advance and don't be afraid to state your intentions, ask about their long-term plans.
Offer to pay more in rent
Let your landlord know you'd love to stay, and even offer an increased rent that you know you can afford. I know that may sound crazy to volunteer to pay more, but I promise that it’s a landlord's dream. They are far more likely to accept a lower rent offer if it comes from you!
Enquire about longer lease options
In times like these, seeking a longer lease option is smart. Most importantly, don't let your lease expire without acting. There is no better protection for a tenant than a current lease. Without one your life can change with little more than a 30-day notice, and you have very little legal recourse to prevent it.
Start looking early and be patient
If you are looking to make a change, be prepared to compete for available homes. Start early and practice patience. If you like something, be aggressive, follow up and be prepared to pay a premium. There aren't many deals to be had, so make sure you're paying for something you really like.
Advice for Property Owners
Property owners often fall into the trap of viewing their tenants as adversaries. "They always have rent issues!" Why do they call every month asking for repairs?!" Trust me, I've heard it all. The reality is, there is no better protection for your investment than a great tenant.
Don’t fall victim to the Zestimate temptation
I get it, you were scrolling through Zillow, curiosity gets the better of you, and type in the address of your investment property. The Rent Zestimate is $1,600? I'm only getting $1,200!!! The temptation is to jack the rent up at the first legal opportunity. After all, if these tenants can't pay it, someone else will!
Maybe, but let's look at the big picture. Many families can't afford such a significant increase. They must make a choice between putting themselves in a dangerous financial position or scrambling for an affordable option with a looming deadline.
Does a rent increase make sense long-term?
Aside from potentially putting your tenant in a rocky situation, it doesn't always make financial sense to attempt such a drastic increase. Let's say the tenant moves and you get your extra $400 per month or $4,800 per year. You will first need to turn over the property and make sure it is in condition to yield top market rent. Turnover costs can vary based on how the previous tenants leave the home. I like to estimate for my clients $1,000 for every year the tenant lived in the house.
The time cost of turnover time
Time also has value. You will lose at least one month of rental income while repairing the property. Then additional time to list the home.
Speaking of listing the home, there are expenses to consider there as well. Marketing fees, MLS fees, and rental commission for the agent who finds your new tenant. When it's all said and done, even with a modest turnover, that $4,800 annual increase could cost you $4,000 or more to secure! If you had offered a more modest $50-$100 increase, you could have yielded the same (or better) results with less headache and built some goodwill with your tenants.
In conclusion, Las Vegas Renter and Property Owners explore your options.
Regardless of which side of the lease your name appears on, I urge you to explore your options, be proactive and communicate. Remember, tenants and landlords are partners, not enemies, so treat each other with understanding and respect and you'll be impressed with the results!
At National Real Estate, we care deeply about our property owners’ investments and the tenant that reside in them.
