Renting? It's a Good Time to Be a Landlord

(May 11) -- Dust off your rental resume, make your lease application shine and suit up for your "rental career."

It's becoming a landlord's market again.

The National Multi Housing Council's Market Tightness Index, which measures changes in occupancy rates and rents, rose sharply from 38 in October 2009 to 81 in April this year -- the highest figure in four years and the sixth straight increase in the measure.

The index has gained steady ground since it came in at 16 a year ago. Figures above 50 indicate improving market conditions -- for the landlords.

The council says 64 percent of respondents -- landlords, property owners, developers, financiers, etc. -- reported that markets were tighter, and that means fewer vacancies and higher rents.

RealFacts found the national average rent for all sizes of apartments was $943 for the first quarter this year, in its most recent national survey of nearly 13,000 apartment complexes with 100 or more units. That figure is up from $932 in the fourth quarter.

Rents were 3.6 percent lowerr from a year earlier, but this was the first quarter-to-quarter increase since the third quarter of 2008, according to the Novato, Calif.-based research company, which surveys complexes largely in the West and South.

While renters need not plan on renting forever, they can gain an edge if they emulate a "career renter" by approaching the rental-housing search much like a professional goes after a top-notch job.

The idea is to be organized, serious and professional in both actions and appearance to demonstrate you will be a good steward for the landlord's property.

When the market leans in the landlords' favor, renters who want to raise their profile can provide not only an application but also an employment-like rental resume profiling past rental experience, professional rent-related references and even a renter's bio or personal testimonial describing the kind of renter they've been and why someone should rent to them.

It's only going to get tougher to lock down a long-term rental contract and cheaper rents or rental concessions. Some landlords prefer the short-term deal because it allows them to raise rents more often. And with competition growing, the feasibility of the short-term lease option also grows.

Growing competition is seen in the recent Experian Hitwise analysis, which reveals that online searches in the rental market boomed 171 percent over the past year, ending in the first quarter. That's more than five times the rate of growth in online homebuying searches, up only 32 percent.

Homes for sale are cheaper than they've been in a decade, but lingering fears about home values are apparently leading a growing number of consumers to hedge their housing bets in the rental market.

Experian said the fastest-growing real estate for rent search terms over the past year were:

• "Cheap homes for rent," up 128 percent.
• "House for rent by owner," up 94 percent.
• "Home for rent by owner," up 84 percent.

The National Multi Housing Council's other Market Tightness Indexes further confirm that a tighter market is ahead for renters.

For the first time since October 2005, all four survey indexes recorded better market conditions than three months ago. A closer look:

• The Sales Volume Index jumped to a record-setting 72 in April, from 56 in October. A year ago it was 30. Property sales rise, in part, when buyers see the opportunity for greater profits through higher rents.
• The Equity Financing Index moved from 66 to 71 in April, another record level, up from 29 a year ago. The index reveals the greater availability of equity financing, an indication of strength in property values.
• The Debt Financing Index also increased, from 49 to 58, up from 41 a year ago. The council says that means borrowing conditions have improved, typically because lenders see less risk in giving credit to acquire profit-making properties.