Realty Times - It's A Renter's Market -- Haggle

Front Page

NEED HELP?

Click for Live Support

Call: 214-353-6980

It's A Renter's Market -- Haggle

by Broderick Perkins

Inflation far out paced changes in rents in 2002 and even the lure of living in bustling downtowns wasn't always a rent booster.

That's good news for those who want to lock in a long term rental contract now and save up for home buying when the economy settles down.

Comparing the fourth quarter 2001 survey with the fourth quarter 2002 survey of more than 3.7 million apartments nationwide, Carrollton, TX-based M/PF Research said rents fell an average 0.3 percent in 2002, with 31 of the 58 metros surveyed giving up rent reductions.

Meanwhile, the U.S. Labor Department's Consumer Price Index jumped 2.4 percent during the same period, thanks largely to increases in energy prices. The index represents changes in the prices paid by urban consumers for a representative basket of goods and services.

Regionally, the Northeast and the West yielded the most attractive spreads between rent changes and inflation.

The Northeast, with the sharpest difference, yielded a 0.4 percent drop in rents as the region's CPI rose 2.9 percent, the largest price hike in the nation. The West registered an 0.8 percent decrease in rents, the largest such decrease, and a 2.1 percent growth in prices. The Midwest wasn't far behind with rents falling 0.6 percent and prices rising by 2.1 percent. Only the South's rents didn't rise, but remained flat while prices increased 2.5 percent.

Some of the largest rent drops by the third quarter last year were found in the metropolitan areas of San Francisco, 13.1 percent; Oakland, CA 7.6 percent; Raleigh, 6.9 percent; Seattle and Austin 6 percent; Boston 3.7 percent; Minneapolis, 3.1 percent and Chicago, 2.6 percent, according to M/PF.

Novato, CA-based RealFacts says falling markets typically yield city rents that hold up better than suburban rents and the downtown core weathers the storm best, thanks largely to the benefit of downtown's desired location.

In San Diego, for example, rents citywide rose 5.3 percent last year, but downtown rents rose 11.1 percent, RealFacts reported. In Denver citywide rents rose only 2.9 percent, but rents downtown increased by a whopping 14.1 percent, nearly five-fold over the city as a whole.

Not all cities, however, enjoyed a boost from the central base.

In San Jose, for example, average rents dropped 8.9 percent citywide, but downtown rents plummeted 15.4 percent. Downtown Los Angeles' rents fell by 0.3 percent last year, but citywide rents were up 6.6 percent.

"Each market must be analyzed to see how its particular conditions impact this relationship," said Caroline S. Latham, CEO of RealFacts.

Terry Feinberg, executive vice president of the Arizona Multihousing Association in Phoenix -- where rents were flat across the board -- agrees.

"The single biggest factor affecting rents anywhere is jobs. Jobs drive demand, and especially given long development lead-times, supply can never keep up with the increasing demand from strong job growth," Feinberg said.

"Of course when an area loses jobs, the number of rental units available does not decline, so we see rents go down. Most people who live in apartments are not willing to endure long commutes, and thus apartment rents are more closely tied to very localized job conditions," he added.

How do you get the best deal in any market?

Be prepared.

Approach your rental-housing search like you would a job search. Be organized, serious, professional, and make sure you stand out as the best applicant. You want to make a good impression and demonstrate that you will be a good steward for the landlord's property. That's a strong negotiating point.

Contact your references ahead of time to be sure your information on them is current and that you have their permission to use them as a reference.

Keep your credit in good standing. Obtain a free copy of your credit report, correct any errors, and make sure what you say in the rental application is consistent with what the landlord will see on the credit report.

Be prepared with all the information you need to complete a rental application and whenever possible, complete the application on the spot. You should have with you full, prior addresses, bank account and credit card numbers, a list of references. Even in slow markets, landlords often will not respond to incomplete applications.

Consider preparing a renter's resume with the information typically required in an application. You may have to repeat the information on the application, or the landlord may accept your resume. In any event, you will stand out as well-organized and prepared.

Let all your friends and associates know that you are looking for a rental home and what you want in a rental home. Explore newspaper classified ads, renter magazines and the Internet for listings. Post notes on bulletin boards at public places you frequent.

Check the latest listings first thing every day, and call early. Respond quickly when a landlord calls you back. If you have a cellular phone, leave that number and have it on while you are out looking at other apartments.

If you leave a message on an answering machine, be sure to speak clearly and slowly, and repeat your name and phone number. Be available to accept or return calls, or state in your message when you will be available.

Know what you really want, and what you don't want. Be flexible with the rest of your criteria. Be prepared to decide on the spot and be prepared to leave a deposit and/or credit check fee.

Cover your assets. When you sign your lease be sure you've obtained insurance protection for your stuff. The landlord insures his property, but it's your responsibility to protect your belongings, including any landlord-approved improvements, appliances or other items, fixtures or devices you've installed.

Published: March 12, 2003

Use of this article without permission is a violation of federal copyright laws.

Related Articles:

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home.

The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services.

The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home.

Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News.

Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake.

He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications.

In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.

Real Estate News Network