Tenant Turnover to Increase
In the past, I have described the seasonal cycle that we tend to see in the rental market. Typically the slowest month is December and January. Things then pick up each month from February thru May, with an explosion in June and July. Then in August it starts to slow down each month until we are at a crawl again around Thanksgiving. Depending on when school ends, our busiest months for the entire year are either June or July. Based on our notices to vacate for July move-outs, we will turnover 8% of our inventory in July. We closed May out with a 3.8% vacancy and pre-leased over 70% of our listing. We’ve also been increasing rents where possible. I’d still like to see the rents increased higher as they did take quite a dip in 2009, but I’m happy with the upward trend I am seeing.
Summertime is Busy
Summer is upon us. I think I say this each year and I forget how busy it gets until it hits. For example, we hold staff meetings every Wednesday from 9am to 11am. When I returned from our staff meeting this morning, I had missed 18 calls and had 13 voicemails. I also received 38 emails during that time. Every time I got on the phone to return a message, I’d hang up the phone and discover new and more voicemails. We’ve increased our staffing to help, but it is what it is and we just suffer through it for 3 months. Just so you know, I have already fielded several calls from tenants stating that they can’t get through. It’s true, at certain times of the day, we are all on the phone one call after the next. Both of the complaints were from callers who didn’t leave a message. If they leave a message, the call is to be returned by the end of the business day. We also add a swing shift in the summer too. That helps with showings and after hours inquiries.
I almost always comment about the multi-family sales market, but that’s not because I don’t follow what is happening residentially, it’s just that I’m much more entrenched with the income properties. With so many 4 plexes coming to the market as bank owned properties and short sales, this market has exploded. Prices are outstanding. Also, I received a rate quote from my lender at 5.125% with a 1% loan origination fee and .75% loan discount fee. Considering the prices and those kinds of loan terms, that’s a pretty good combination. So yes, I am still finding the biggest bang for your buck to be 4 plexes. I don’t know a lot about stocks, but what comes to mind right now is the stock broker in the movies calling everyone telling them to “buy, buy, buy”. I think we’re there.