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Old 06-11-2011, 08:00 PM
 
Location: Twin Cities
302 posts, read 729,279 times
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I keep hearing that rentals are in short supply everywhere....including the Twin Cities and suburbs. Does anyone have any insight on the local rental market for town homes and single family homes? And if the rental market is strong, do you think the need for rentals is just a temporary thing (in a state where home ownership is typically high)?? Thanks!
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Old 06-12-2011, 12:07 AM
 
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I've always been a lifelong renter. I don't care to own my own home until I'm finally living where I know I never want to leave. I don't believe in starter homes (at least not for me).

That said, finding rental properties of all kinds has never been a problem in the Twin Cities. The need for rentals will always be there. Just like with houses where sometimes it's a buyer's market and sometimes it's a seller's market, the same thing applies towards renting. Sometimes it's a boom for the renter and at times it's all gravy for the landlord.

I've had two apartments over the last eight years. Both very comparable in size and amenities. I started out paying $625 and that went to $640. For five years in that place, that's not a bad pace for a rent hike, which only occurred in the fifth year. At my new apartment (of three years), I started paying $621 a month and, as of this year (first hike in three years) it's $626 a month. That's only $1 more than I was paying eight years ago.

Not. Bad. At. All. And I'm happy.

As for single family homes and town homes, I've not rented them because I'm single and everything I own would fit into one room! (I hate owning or collecting much.) It can be tough in hard times because people/families generally don't have that kind of money to pay for a rental home. The rent is usually the equivalent to a mortgage payment and often higher. Even in good times, you have to worry about people moving on to home ownership "since they're already paying an amount equivalent to rent."

If you're looking to invest in property to buy so you can rent it out, here's a tip that will keep you in long term renters who will care for your property. Be the kind of landlord you would want if you were the renter. Don't raise rents just because you can.
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Old 06-17-2011, 01:19 PM
 
Location: Cleveland bound with MPLS in the rear-view
5,509 posts, read 11,909,395 times
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less than 3% vacancy....at least in some sub-markets like Uptown. The average is usually 5%-6%.
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Old 06-17-2011, 11:51 PM
 
2,271 posts, read 2,659,069 times
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Quote:
Originally Posted by west336 View Post
less than 3% vacancy....at least in some sub-markets like Uptown. The average is usually 5%-6%.
I always wonder how they get statistics like that. I live right in-between Uptown and South Minneapolis and there are loads of vacancies around here. And it's a doggone nice neighborhood that I'm none to keen to leave anytime soon!
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Old 06-18-2011, 06:34 AM
 
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Plain and Simple pointed out something which I think is the key: For single family homes and townhomes, the rent is usually equal to or higher than a mortgage payment.

You're not likely to get a long term renter in that situation but more apt to get the family that is moving to the cities, needs a place fast but doesn't want to buy until they get a feel for the place and know where they would like to put down some roots. Anyone who plans on being here a while probably wouldn't pay that much just to rent when home ownership (usually) is more profitable in the long run.

As far as vacancies go, I"m currently looking and am having no problem finding ample options, granted not all live up to my standards - but I"m picky. Even places like Uptown do have plenty of options - and I think they claim a 3% vacancy because while the 'for rent' signs may be up it is usually in advance of the vacancy. So by the time someone is ready to move out, they've already got the next renter lined up. But that's just my perception.
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Old 06-19-2011, 06:38 AM
 
Location: Twin Cities
302 posts, read 729,279 times
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Thanks for all the feedback! I ended up putting my townhouse in the north metro up for lease (1 year min) and it received applications from the first two people that looked at it. It basically was rented out in 1 day. Lease has been signed. It more than covers my mortgage and home owners association fees. Wow. I was prepared to lower the asking price (rent) but it went so fast? I'm just happy it's rented out and I can move! Would NEVER be able to sell in this market (unless I want to lose $50k+!)
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Old 06-19-2011, 09:13 PM
 
290 posts, read 549,180 times
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For all the talk about the rental market tightening up in the Twin Cities, it's interesting that I'm not seeing it in Uptown. I'm shocked that prices really haven't gone up much since I left there 10 years ago. At least for the standard older units. Obviously the new buildings command a price premium. But to get a studio in the $500s and 1 bedroom in the $600s is pretty much what they were 10 years ago. Over the winter when I was looking, many places in Uptown were offering concessions like 1 month free or free parking, etc. I realize it's the winter market and not many people move then, but still, this is Uptown! Any idea why the market appears so soft there? Are so many people needing the amenities of the newer buildings and pay the premium? Or have so many people just moved to Northeast? Or are people so poor these days that they find a place further away from Uptown to save money?
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Old 06-19-2011, 10:16 PM
 
Location: Cleveland bound with MPLS in the rear-view
5,509 posts, read 11,909,395 times
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Quote:
Originally Posted by swmrbird View Post
Plain and Simple pointed out something which I think is the key: For single family homes and townhomes, the rent is usually equal to or higher than a mortgage payment.

You're not likely to get a long term renter in that situation but more apt to get the family that is moving to the cities, needs a place fast but doesn't want to buy until they get a feel for the place and know where they would like to put down some roots. Anyone who plans on being here a while probably wouldn't pay that much just to rent when home ownership (usually) is more profitable in the long run.

As far as vacancies go, I"m currently looking and am having no problem finding ample options, granted not all live up to my standards - but I"m picky. Even places like Uptown do have plenty of options - and I think they claim a 3% vacancy because while the 'for rent' signs may be up it is usually in advance of the vacancy. So by the time someone is ready to move out, they've already got the next renter lined up. But that's just my perception.
OR the person who wants SFH living without the SFH credit or downpayment! That is a HUGE factor in rental housing today, and one I hope to capitalize on someday!
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Old 06-19-2011, 10:18 PM
 
Location: Cleveland bound with MPLS in the rear-view
5,509 posts, read 11,909,395 times
Reputation: 2501
Quote:
Originally Posted by queenswake View Post
For all the talk about the rental market tightening up in the Twin Cities, it's interesting that I'm not seeing it in Uptown. I'm shocked that prices really haven't gone up much since I left there 10 years ago. At least for the standard older units. Obviously the new buildings command a price premium. But to get a studio in the $500s and 1 bedroom in the $600s is pretty much what they were 10 years ago. Over the winter when I was looking, many places in Uptown were offering concessions like 1 month free or free parking, etc. I realize it's the winter market and not many people move then, but still, this is Uptown! Any idea why the market appears so soft there? Are so many people needing the amenities of the newer buildings and pay the premium? Or have so many people just moved to Northeast? Or are people so poor these days that they find a place further away from Uptown to save money?
I think that'll soon change. A 3% neighborhood vacancy (that is for sure for Uptown) and new rents charging $1000-$1200 and up is going to swing a lot of demand back to those older 1900's brownstones that currently go for pennies on the dollar. That's just my guess. If I were investing in the area right now, that's an area I'd be focusing on -- cheap apartments next to luxury developments.
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Old 06-21-2011, 07:27 PM
 
Location: Twin Cities
302 posts, read 729,279 times
Reputation: 330
Quote:
Originally Posted by west336 View Post
OR the person who wants SFH living without the SFH credit or downpayment! That is a HUGE factor in rental housing today, and one I hope to capitalize on someday!
I agree! I think these are the people I got offers from (multiple) on my 2 bedroom town home in the suburbs!
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