Real Estate and Rental Vacancies

Real estate is accountable for the creating more wealth than every other investment vehicle. It is mostly regarded as a safe investment. That's not quite that true to be honest, because the risk remaining in property investments is a lot bigger for a small time investor. Let's say you only own a single rental property, your rental vacancy rate or (RVA) will either be 0% or one hundred percent. While multi-housing properties fare much better. If your rental property stays vacant for a while, then the outcome will likely be a larger monetary loss. A bigger investor usually will have many properties, and even usually during the off seasons some of these are going to be have occupants.[3]

While most of the cases, rental revenue from the properties that have tennants will cover the costs of all of the properties. Even if there is no genuine revenue being made, this investor is remaining in the game for when the market picks up. In the event of the rental income not providing sufficient revenue, it is going to still be bringing in something. You're never going to be assuming the risk that the smaller investor has to take on purely because of the all or nothing character of their investment.

The 1st step in attempting to achieve an extremely low rental vacancy rate, and this step needs to be taken right at the time you are purchasing the property. While there is certainly a demand for any housing which contains no obvious flaws, there are locations that are exceptionally popular. This is probably be as a result of proximity to local transport links, a low crime rate, or high-quality local facilities. If you are able to do your research well enough to expose these areas, you can discover the higher demand provides a head start.[1] There will already be a lot of individuals looking for specifically what you'll have to offer and providing you with an extremely low if not zero rental vacancy rate.

Tracking it All

The United States Census Bureau collects information on "Rental and homeowner vacancy rates and homeownership rates are available for the U.S., regions, states, and for the 75 largest Metropolitan Statistical Areas (MSAs)."[4] Data for all geographies are available both quarterly and yearly. Homeownership rates are also tabulated by age of householder and by family status for the U.S. and regions and by race/ethnicity of householder and by median family income for the U.S. In addition, estimates of the total housing inventory and percent distributions of vacant for-rent and for-sale-only units are available for the U.S. and regions."[2]

One confirmed successful procedure when you are renting furnished property is to give an occupant the furniture for free if they stay for a specific length of time. The cost you'll need to pay for new household furniture is going to be far lower than the financial savings you will no doubt have produced by having a completely occupied property for 2 or 3 years.[6] Don't forget, also, that you will only need to replace the furniture when the renters leave and take the old furniture with them. The furniture method can also be effective in reducing tenant behavior troubles, because tenants won't want to be driven out before they are near claiming the furnishings.

[1] - Yahoo Finance, "US Multifamily Market to Remain Strong", https://finance.yahoo.com/news/u-multifamily-market-seen-remain

[2] - United States Census Bureau, "QUARTERLY RESIDENTIAL VACANCIES AND HOMEOWNERSHIP, FIRST QUARTER 2019", https://www.census.gov/housing/hvs/files/currenthvspress.pdf

[3] - Washington Post, Experts weigh in on what the 2019 rental market will bring, https://www.washingtonpost.com/business/2019/01/14/experts-weigh-what-rental-market-will-bring

[4] - United States Census Bureau, "Housing Vacancies and Homeownership (CPS/HVS)", https://www.census.gov/housing/hvs/

[5] - Denver Post, Metro Denver apartment rents rise, vacancies fall https://www.denverpost.com/2019/04/27/metro-denver-apartment-rents-rise/

[6] - Forbes, "These 10 Cities Are On The Brink Of A Housing Crisis In 2019", https://www.forbes.com/sites/andrewdepietro/2019/04/16/cities-negative-equity-housing-crisis-2019/

Domain, "What is the rental vacancy rate?" Youtube

© Copyright 2019 - Sell My House Easy Fast - All Rights Reserved