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The Newsroom - 2010 |
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RENTERS' MARKET:
SWEETENING THE DEAL
Apartment companies lowering rents, making
other offers to keep occupancy
rates up
January 03, 2010 -
It pays to be a
renter these days, especially if you're in the market for an apartment.
Flexible contracts, relaxed policies, free trips and electronics are among the
offers local apartment companies are making to attract new renters and entice
them to sign leases.
But the best and most common incentive these days is one that renters need more
than anything, experts say: money.
"Because of that occupancy loss, apartments are either lowering rents or
offering one or (two) months' free rent," says Arlene Mayfield, president of
Apartment Guide, a publication that offers listings of local properties and
their amenities.
They're also waiving application fees, offering to pay for utilities and holding
apartments for a fraction of what companies required when the housing market was
booming and apartments were in high demand, she adds.
"When the market was really good, we saw companies charge for water, submetering
for utilities," Mayfield says. "Because it is so tough to get renters these
days," companies are picking up those tabs.
At the end of the third quarter, occupancy rates in the valley were 91 percent,
down from 93 percent the same time in 2008, says Jake Joyce, analyst for Applied
Analysis.
That is down significantly from the 95 percent and higher rates of the boom
years, notes Robert Correa, district manager for Camden properties.
People think apartments should be doing great because the foreclosure rate is so
high, he says. But many people are cutting back, moving from three to two
bedrooms, doubling up with a roommate or renting a house. The glut of empty
houses in the valley creates a shadow market that drains renters away from
apartments.
All of this has driven rent prices down, too, Correa says. The average monthly
rent for an apartment in the valley was $840 at the end of the third quarter of
2009. That's $50 less than the $890 average in the third quarter of 2008, Joyce
says.
Montego Bay in Henderson is sitting at about 96 percent occupancy, says former
property manager Jill Panyi. Still, rents have been lowered significantly to
attract new business. There seems to be fewer people to fill more vacancies.
A one-bedroom apartment was $850 a month, Panyi says. It now rents for $719.
In 2008, management offered new renters a chance to pop a balloon and win a
prize, anything from DVD players to MP3 players. With unemployment increasing
and job security faltering, people would rather have fewer expenses than a new
toy, she says.
In recent months, management has waived application fees and given renters the
chance to "win" discounts through drawings or scavenger hunts.
Customer service becomes more important in this type of climate, Correa says, so
management must listen and respond to tenants' needs.
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Las Vegas Review-Journal
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A sign advertises a
two-bedroom special at Summerhill Villas apartment
complex located on Tenaya Road near Lake Mead Boulevard. Photo by Craig L.
Moran
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A stable job history and good credit have long been industry requirements for
leasing apartments, but with the valley's employment market, companies have
become more flexible. They will take a renter with only three months on the job,
Correa says, when they might have required a 12-month history. Camden properties
offer a bankruptcy forgiveness program because the company knows that even
someone who forecloses on a house and files for bankruptcy may still be able to
afford rent, Correa says.
Apartments also are becoming more flexible on their pet policies, Mayfield says.
In the past, they charged pet deposits and even restricted renters from owning
pets of certain sizes. Now, companies are working with potential tenants who
have animals.
It is a renters' market, Correa says, and consumers can find great deals. The
best thing to do is shop around for the deal that is right for you. But, like
all good things, it will one day come to an end. Experts think that the market
will pick up and absorb vacancies, creating high demand again. When that
happens, prices will increase and incentives will vanish.
But, if you're looking for an apartment now, you have plenty of time. At least
until 2013, when things are expected to get better, Correa says.
« Go Back
Author: S. Padgett, Las Vegas Review-Journal
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