Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I've been following the market for puchase of residential properties in central New Jersey: it's been weak, and prices have dropped significantly.
I can't find any information on the rental market. Does anyone know if rental rates are coming down like purchase prices? Any recommendations as to where to find solid data on this?
it's usually an inverse relationship -- if housing prices are down, rental prices are up, and vice versa.
however, this downturn has resulted in some homes (that couldn't sell) winding up in the rental market, and that theoretically will drive down rental prices.
this assumes that you're looking to rent a house... if one is looking to rent an apt. then it really depends on the area. Hoboken rentals, for example, will never be inexpensive
it's usually an inverse relationship -- if housing prices are down, rental prices are up, and vice versa.
I don't think this is true. I think housing prices -- whether rental or purchase -- usually rises or falls together.
When home prices are going up, it costs more to pay the mortgage, hence it costs more for a landlord to invest in a property and that results in higher rent. Also, higher home prices mean that landlords can raise rents and it will still be more attractive to rent because house prices are high.
When house prices fall, mortgages are lower and so the monthly nut needed for a landlord to cover his expenses are lower, which results in lower rent as landlords compete for tenants. Not to mention all the desperate owners who can't sell their homes and are trying to rent out the homes for at least a fraction of the mortgage so as to slow the bleeding.
Rents are on the way down, just like house prices. A buddy of mine just negotiated a 10% decrease in his rent from a major rental company in Hoboken, one of the most active and expensive rental markets in NJ.
As to the last post, you are wrong. Rents do not go down. There is a cap in NJ as to how much you can charge for rent. Currently a 3 bd apt goes for $1500. I as a landlord know this for fact. I will say however depending on where you own the property, if you have a great tenant whom pays (even if a week late) you may adjust accordingly to keep them affording the unit. The last thing you want is a lot of turnover. I can say now there are very few vacancies as everyone needs a place to live. It is definitely a Landlords market right now.
As to the last post, you are wrong. Rents do not go down.
LOL - "rents do not go down" ...
What is that - some law of physics you just made up?
Tell that to my buddy who just negotiated a 10% DECREASE on his rent in Hoboken -- one of the hottest and most expensive rental markets in North Jersey. He probably could have found an even better rent, but he didn't feel like spending any time looking or moving. A simple phone call and a suggestion that he was considering moving out had his landlord bending over backward to lower the rent for him.
But thanks for the insight into your fantasy world, Mr. Landlord.
What is that - some law of physics you just made up?
Tell that to my buddy who just negotiated a 10% DECREASE on his rent in Hoboken -- one of the hottest and most expensive rental markets in North Jersey. He probably could have found an even better rent, but he didn't feel like spending any time looking or moving. A simple phone call and a suggestion that he was considering moving out had his landlord bending over backward to lower the rent for him.
But thanks for the insight into your fantasy world, Mr. Landlord.
I raised the rent for every apt. I have with the upcoming end of leases in May. I have a 3% increase per year cap, unless I show major improvements and then I can raise it more.
What I usually do, if I have a good group of tenants, is only raise it 1.5%. Property taxes do go up in this wonderful state...year after year...
What was your friend's rent? The 10% decrease he gave your friend could have paid for a month of weekends of advertising in the Star Ledger. Not to mention the landlord's time to take phone calls, show the apt, etc. Time does = money when you're in business. Some landlords are making so much off their tenants that to avoid the hassle of re-renting I could see where a negotiation in rent may be the easiest and least costly route for a landlord. In any housing market or economic crunch.
I don't negotiate rent. It is what it is for a reason and if someone doesn't like it, they can find somewhere else to live. I also deal with a specific "market" when it comes to renters so it is a little different for me.
When housing prices are "normalized" (which people today think of as "market hit bottom price"), interest rates are typically higher and the cost of renting is also high. Right now, interest rates are artificially (key word is artificially) low...but people still aren't buying, people are waiting for everyone who has a home for sale to give their home away. So what are these people who are waiting doing? Renting...while waiting for something that may not happen to the point they are holding out for. I see bidding wars in the near future when interest rates start to creep back up into the 8% and over range.... and those people who are holding out for sellers to give their homes away start doing the math and come to the conclusion that they no longer afford the home they've had their eye on for the past year...when interest rates were hovering in the 5% + or - range (depending on the day).
Last edited by JerseyG; 03-18-2009 at 07:02 PM..
Reason: can't spell
As to the last post, you are wrong. Rents do not go down. There is a cap in NJ as to how much you can charge for rent. Currently a 3 bd apt goes for $1500. I as a landlord know this for fact. I will say however depending on where you own the property, if you have a great tenant whom pays (even if a week late) you may adjust accordingly to keep them affording the unit. The last thing you want is a lot of turnover. I can say now there are very few vacancies as everyone needs a place to live. It is definitely a Landlords market right now.
What are you talking about?
I'm renting a 3 bedroom townhouse and it's $1850/month. And while looking for this rental, we saw the gammet of both prices and conditions - anywhere from $1500 up to $2600 for units.
There is no cap as far as what you want to charge for rent. There is only a cap as far as what someone is willing to pay for a unit.
I "Mr. Landlord" do live in reality.
As JerseyG said IF the landlord gave you a deal it's because they don't want to take the time to find another tenant. That's it. Face it, Landlording is a FULL TIME job, those of us whom do this job expect to get paid for our time,(don't you?) so if I could take a week off ($300) I would. Heck the $300 each month would give me(if I worked at Walmart or something similar) a week off each month that I could spend with my family. It's a no brainer!
Again I have tenants that I haven't increased in 3 years. The reason I do that is because they are GREAT tenants and take care of the unit.If there's a problem I fix it. There are some Landlords out there that are only out for the $, but there are a few with a heart. If a tenant of mine " wants a deal" the only one I am giving is NO INCREASE per year, I raise only every 3-5 and then it's 3%.
So lets do the math here....(using a $2000 rent)
yearly increase of 3.5% (state average) x 5 years = $375.36
If the discount was $300+ then its the same thing as NOT increasing yearly as a Landlord is entitled to do. Technically there really isn't any DEAL.
The big issue here is how people automatically think that anyone who is a Landlord is "rich" or some crap. HAHAHAHA. The only one's rolling in it are the slum lords, those of us that take care of our properties and do improvements, etc. to keep the quality of life up are doing well, but the bills are there. Everytime someone moves out we need to paint, change carpeting, clean the place, remove garbage, fix holes in the walls, sometimes replace the floor and kitchen cabinets (very common) and in the rare occasion replace bathroom fixtures due to being nasty. That doesn't include all the major maintenancce and replacement costs included in home ownership. I ask does the Tenant care? About 40% of the time they do, the rest don't, I mean come on it's not like it's their home!
I see bidding wars in the near future when interest rates start to creep back up into the 8% and over range.... and those people who are holding out for sellers to give their homes away start doing the math and come to the conclusion that they no longer afford the home they've had their eye on for the past year...when interest rates were hovering in the 5% + or - range (depending on the day).
You see bidding wars when rates go up to 8%+ and buyers see that they can no longer afford the home?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
