More by Mackenzie Born at Avail

When Should You Sell a Rental Property?

Mackenzie Born — Tue, 15 Mar 2022 14:05:55 +0000

Investment properties can be a lucrative source of passive income, but factors like profitability, maintenance, and the housing market at large can become good reasons to sell a rental property.

According to Avail data, roughly 16% of landlords reported plans to sell an investment property in 2022. If you’re wondering whether to sell your property or when to sell it, here’s what to know about selling a rental property.

How Do I Know if I Should Sell My Rental Property?

Determining whether to sell or keep renting your property depends on a variety of factors, but these are a few indicators that it may be time to consider selling:

Profitability: Ideally, your rental property should bring in more money than you’re spending to maintain it. If the rental income you’re generating isn’t higher than the cost of your annual operating expenses, the profits (or lack thereof) may not be enough to justify holding on to the property.
Maintenance: Maintenance is an unavoidable part of owning a property, but it can be time consuming. If the time and money spent on rental property maintenance becomes overwhelming, it may be time to consider hiring a property manager or selling.
Tenant turnover: High tenant turnover can be the result of many things — the rental market, the property itself, or even your style as a landlord. But high tenant turnover means spending time and money advertising your property and losing rental income due to vacancy, which can become unprofitable over time.
Property finances: Financial factors like property appreciation, capital gains from selling a rental property, and new investment opportunities should be considered, too. If your rental property is worth a lot more now than when you bought it or you’ve identified an even better investment opportunity, it could make sense to sell. Note that it’s important to be aware of any capital gains taxes from a sale and how to defer them with a 1031 exchange.
Housing market: The current housing market can dictate how much you can charge for rent, how high tenant turnover is, and how valuable your property would be if you were to sell. In highly competitive housing markets, landlords may be more incentivized to sell a property.
Location: If you’re moving away from your rental properties, you can always try long-distance real estate investing. But since this often means hiring a property manager, some landlords opt to sell their rentals, instead.

When Is the Best Time of Year to Sell a Rental Property?

Based on Realtor.com® data, the week of April 10-16 is the best time of year to list a home for sale in 2022. Why? According to seasonal data from 2018, 2019, and 2021, this week in April has the most favorable conditions for home sellers when looking at factors like competition, listing prices, days on market, likelihood of price reductions, and homebuyer demand.

Compared to other weeks in the year, Realtor.com®’s historical data from April 10-16 showed higher-than-average listing prices, more buyers looking at listings, homes selling more quickly due to higher demand, and even a lower level of competition from other sellers.

What To Do Before Selling a Rental Property

Before you list your rental property on the market, a few things need to be handled:

Notify your tenants: You’ll need to give tenants appropriate notice that you’re selling the property. The amount of notice often depends on your lease and local laws, but can also dictate your timing for listing the property. In some cases, tenants will need to leave the property, but in others, a new owner will take over the rental lease.
Prepare the property: Once you notify tenants of the sale, you’ll need to prepare the property for sale. This consists of a property inspection — regardless of whether tenants are staying or leaving — to identify any wear and tear or damage and address any needed repairs. If tenants have moved out of the property, it may be a good time to tackle property renovations that will help increase the value of the rental.
Research home value: Doing some research on your property’s value is essential, even before working with an agent. Tools like Realtor.com®’s My Home give a breakdown on a property’s value, local market trends, and how your property compares to those currently for sale.
Work with an agent: You can sell a property on your own, but most sellers choose to work with a real estate professional to make the selling process a lot smoother. An agent will be able to help you prepare the necessary paperwork, get your property in front of buyers through a multiple listing service, and assist with the entire home-selling process.
Time your sale: To avoid being hit with short-term capital gains tax, it’s commonly advised to hold on to a rental property for at least one year. In some cases, you’ll want to wait until a lease has expired or allow time to complete renovations. An agent can help you make decisions about when to list your property on the market, or you can use market trends and research — like those provided by Realtor.com® — to help determine an optimal time to list.

Resources for Selling a Rental Property

To ensure you’re well-organized as you head into the selling process, use a move-out inspection checklist to note any necessary repairs for your rental and provide your tenants with a security deposit return letter to document any funds taken from their deposit upon lease termination.

When you’re ready to sell your rental property, Realtor.com®’s home selling resources can help you track your property’s value and match you with a trusted real estate professional to guide you through the home selling process.

The post When Should You Sell a Rental Property? appeared first on Avail.

What We Learned From a Successful Real Estate Investor

Mackenzie Born — Fri, 18 Feb 2022 17:44:31 +0000

The concept of full-time real estate investing was sparked for Kendra Barnes during a game of Cashflow — a board game that uses components from real estate investing to teach you how to build wealth. After that game, she bought her first investment property, quit her government job in Washington, D.C., bought more investment properties, and founded The Key Resource to help other beginning investors carve their own paths.

We spoke with Kendra about how she made a profitable career out of real estate investing, what she’s learned along the way, and how the industry has been changed by COVID and a new wave of investors.

How Did You Transition From a 9-to-5 Job to a Full-Time Real Estate Investor?

“We never imagined investing in real estate,” recalls Barnes, who owned a house in Washington, D.C. with her husband and worked as an international economist for the U.S. government. “It wasn’t that we didn’t think we could do it, but we had literally never thought about it.”

The board game Cashflow opened up the idea of passive income for Barnes — and made her realize working a nine-to-five job until retirement age wasn’t the only option. She and her husband played the game on a Saturday night, and by Monday, they were already looking at investment properties.

Because they didn’t have enough money for the down payment on the D.C. property they wanted, they took a loan out from their retirement funds (Barnes recommends consulting a financial advisor before taking similar steps).

Once Barnes started seeing a return on their first investment property, she and her husband were eager to buy another — which they did through house hacking, or living in one unit of the multi-family property they had purchased while renting out the other three units.

“We started using money from one rental to fund the next,” said Barnes. “People ask me all the time how many rental properties they need to retire or be financially free, but there is no magic number. It depends on where you’re at and the financial goals of each individual investor.”

Pro Tip: There are different types of real estate investments, so it’s important to determine which is best for you.

What Were the Biggest Challenges You Faced When Starting Out in Real Estate?

“Lack of knowledge, followed by lack of funding,” said Barnes, which was part of the reason she wanted to bridge the gap in knowledge and share what she had learned (and the mistakes she made) in her own investing journey.

“One of my friends jokingly said, ‘Did you have to rob a bank?’” Barnes recalls after sharing the news of her newly-purchased four-unit building on Facebook. “I realized there was a gap in information. People wanted to do this, but they really didn’t understand how to start.”

Barnes notes that buy-in from family and friends can also be a major obstacle, especially if investing in real estate isn’t common within a social circle.

“In the Black community, conversations about wealth, in my mind, were lacking,” said Barnes. “We weren’t talking about it in our families, we weren’t talking about it among our friend groups, and I know people often need to see themselves represented in a story. So I started the Key Resource to bridge that gap and be the representation that I wish I had when I started.”

Have You Seen a Shift in the Kind of Investors That Are Getting Into Real Estate?

“One hundred percent,” said Barnes. “I would say 95% of my students and coaching clients are single Black women. There’s a misconception that you have to be wealthy first, or that you can’t do it on a single income, but that’s not true.”

In Barnes’ new book, “Acres,” she highlights the stories of 25 Black investors that built their wealth from the ground up — some of them overcoming homelessness or six-figure debt to build million-dollar portfolios.

“The face of real estate investing is changing and people are realizing that wealth is not a prerequisite, but a byproduct of investing.”

How Do You Think the Industry Has Changed From COVID?

Barnes has seen a mixed bag of reactions to real estate investing brought on by the pandemic. On one hand, people have realized the importance of multiple streams of income when traditional jobs can be taken away at the moment’s notice. On the other, she acknowledges the fear many investors have experienced over tenants not paying rent.

The pandemic has also helped widen the opportunity for long-distance real estate investing. “People are jumping on the remote investing train because they realize that if they live in a high cost of living area, they get a bigger bang for their buck shopping in the lower cost of living areas,” Barnes said.

But overall, Barnes thinks COVID has taught investors to better prepare for all outcomes and be aware that things can quickly change.

“People often find a property and think of one use for it, and those are the only numbers they run,” said Barnes. “But what happens if it doesn’t work out? What happens if something changes, like the county puts restrictions on short-term rentals? When you’re identifying a property, you have to make sure that you’re putting yourself in a position to pivot and still be profitable.”

How Can Real Estate Investors Connect and Learn From One Another?

Barnes’ favorite networking tool has been Instagram, where she connected with almost every investor featured in “Acres” and has been sharing stories of other successful real estate investors through her account for years.

“I’ve met some of my lifelong friends through Instagram, just for the love of investing,” she said.

She also points to Facebook groups, local real estate investing meetups, and networking through social media, with an emphasis on listening to other investor stories and learning from their successes.

“My story is cool, it’s unique, but there’s so many other people out there doing things differently than me that can help someone in a different way.”

Connect, Learn, and Network

You can read more about “Acres” and connect with other real estate investors on the Avail Community Forum, search for real estate investing topics in our library of educational content, or sign up for our newsletter below to receive tips, news, and educational resources right to your inbox.

The post What We Learned From a Successful Real Estate Investor appeared first on Avail.

Growing Renter Confidence Fueling Hot Market to Start 2022

Mackenzie Born — Tue, 15 Feb 2022 14:00:00 +0000

Entering the third year of rental market disruptions caused by the pandemic, Avail (part of Realtor.com®) surveyed independent landlords and renters across the country to find out how they’re faring. Our data revealed moving trends, insight into rent payments and evictions, and how landlords plan to financially recoup and adapt their renting policies for a post-pandemic era.

Based on our data, these six trends will shape the independent rental market in the beginning of 2022.

1. Nearly Half of Renters Plan to Move This Year, But Most Will Continue to Rent

Our survey showed that while renters are moving, most of them will continue to rent their homes — even in a competitive rental market that’s expected to continue into 2022, driven by a demand for rental housing and a decrease in homebuyer sentiment due to high mortgage rates and home prices.

Almost half of renters surveyed (45.9%) reported that they plan to move residences within the next 12 months, with another quarter (24.6%) unsure about their moving plans. Of those that said they will be moving, more than half (51.8%) plan to rent their next residence, while nearly one-quarter (23.8%) plan to buy their next residence.

Over half (52.9%) of renters who plan to move to a new rental indicated they do not have enough savings for a down payment on a home, while 40.0% said they don’t believe they would qualify for a mortgage.

2. Renter Confidence Has Grown Dramatically

Our last survey in September 2021 showed that 42.7% of renters had missed at least one rent payment since the start of the pandemic — up from the 30.8% who had missed a payment in May 2021.

New data, however, indicates more positive rent payment trends. Four out of five renters (82.4%) said they have not missed any rent payments over the past 12 months. Of renters who have missed a rent payment over the past 12 months, around one-third (32.6%) indicate that they had missed just one payment.

Looking forward, more than three-quarters of renters surveyed (76.6%) do not believe that they will miss a rent payment in the next three months. The share of renters who do not believe they will miss a rent payment in the next three months has grown dramatically over the past year. In our February 2021 survey, just 15.2% of renters did not believe they would miss a rent payment over the next three months.

3. More Landlords Plan on Raising the Rent Than Selling Their Properties

As landlords attempt to offset missed rent payments caused by the pandemic, many predicted that they would either raise rent or sell to recoup pandemic losses. According to our data, more landlords plan to raise the rent in at least one of their rental properties (65.1%) than sell at least one of their rentals (16.2%) in the next 12 months.

The majority of landlords surveyed estimate that they will raise rent by between 5% and 10%, increases that reflect a hot rental market and rent surges seen in 2021.

Of the landlords planning to sell at least one rental property, more than half (55.1%) indicate that the desire to cash in on the increased value of their property is a factor in deciding to sell. Around a quarter of these landlords indicated no longer wanting to be a landlord (25.7%) or difficulty collecting rent from tenants (23%) as factors in their decision to sell.

4. The Majority of Landlords Have Not Sought an Eviction

As eviction moratoriums were lifted in 2021 and renters were still struggling to make payments, it was unclear how many renters may be evicted from their residences. However, our data shows that the majority of landlords (82.3%) have not initiated eviction proceedings against any of their tenants in the past 12 months, and more than three-quarters of landlords (77.5%) are not considering encouraging a tenant to vacate a property within the next three months.

Renters have echoed this sentiment, with 94.7% reporting that they had not had eviction proceedings brought against them by a landlord in the past 12 months. Other methods of encouraging a renter to vacate a unit were also rarely reported: Just 5.1% of renters mutually agreed to terminate their lease, and another 5.1% had a landlord refuse to renew their lease.

Looking forward, more than a third of landlords (36.1%) indicate that just one month of missed rent would trigger them to push for eviction. An additional 51.4% indicate they would push for eviction after two or three months of missed rent.

On the other hand, more than 70% of renters believe that just one or two months of missed rent payments would trigger their landlord to push for eviction, and the vast majority of renters (96.7%) believe that six or fewer months of missed rent payments would trigger their landlord to push for eviction.

5. Awareness of Emergency Rental Assistance Has Stagnated

Previous Avail surveys have exposed a lack of awareness and understanding of eligibility around emergency rental assistance (ERA) programs. In our September 2021 survey, more than half of renters (62.8%) and landlords (56.9%) were unsure of whether or not they were eligible for ERA programs, with just 56% of renters and 78.1% of landlords aware that rent assistance programs even existed.

New data indicates that awareness around these programs has not increased. Only 51.3% of renters and 70.5% of landlords said they are aware of emergency rental assistance programs created to help renters and landlords during COVID-19 — a small drop in awareness among both groups.

Among the renters who are aware of emergency rental assistance programs, just 1 in 5 renters (21.2%) believe they are eligible to receive emergency rental assistance to cover missed rent payments.

Nearly half of landlords (46.1%) are unsure if they are eligible for emergency rental assistance to cover their tenant’s missed rent payments, while 3 in 10 (30.2%) do not believe they are eligible for emergency rental assistance.

6. Many Landlords Are Tightening Their Tenant Screening Practices

After disruptions and financial losses caused by missed rent payments due to the pandemic, 40% of landlords indicated that their applicant screening method had become more stringent over the past 12 months. Nearly 6 in 10 landlords (58%) said their screening practices had remained the same.

When landlords screen tenants, the most commonly-reported methods were using income and job history (89.3%), interviews with applicants (84.3%), and rental history and evictions (82.4%) to screen rental applicants. Of this information, landlords indicated that previous eviction (54.6%) and level of income (52.9%) are the two most important factors when screening applicants.

More than 4 in 10 landlords (44.2%) indicate that they allow applicants to explain any negative information in their tenant screening report. When it comes to rejecting tenant applications, most landlords (53.1%) reported that they reject less than half of applicants based on tenant screening information.

Renter Data: Renter Experience, Building Sizes, and Average Monthly Rent

More than a quarter of renters surveyed (27.7%) reported that they have been a renter for less than a year, while nearly half of renters have been renting for less than three years (48.8%) and almost a quarter have been renting for more than 10 years (23.3%).
Three-quarters of renters live in properties with four units or less (66.4%), and nearly 1 in 10 renters live in properties with more than 100 units.
The average rent paid by renters surveyed was $1,388 per month. Median rent was $1,253 per month.
Nearly 7 in 10 renters (69.6%) finance their monthly rental payments through regular employment; More than 1 in 10 renters (13%) receive government aid or assistance, are finding new employment or sources of income (12.7%), or are using savings (11%) to finance their rental payments.

Landlord Data: Landlord Experience, Property Sizes, and Mortgages

More than half of landlords (51.3%) surveyed indicate they’ve been a landlord for more than 10 years, while two-thirds (67.6%) have been landlords for more than five years.
More than 7 in 10 landlords own either one (32.1%) or two-to-four properties (38.8%).
More than 6 in 10 landlords own one-unit properties, while 4 in 10 landlords (40.6%) own two-to-four unit properties.
7 in 10 landlords (70.6%) own at least one rental property that has a mortgage.

Research Methodology

The Avail quarterly landlord and renter survey was conducted nationwide between January 13th, 2022 and January 25th, 2022. Approximately 1,156 landlords and 2,163 renters were surveyed. The margin of error for landlords is estimated at ±2.9% and ±2.1% for renters.

Avail regularly conducts rental market research to understand the needs of independent landlords and their renters. To stay up to date with rental market trends, news, and current research, join our special reports mailing list.

The post Growing Renter Confidence Fueling Hot Market to Start 2022 appeared first on Avail.

Best Places to Buy a Rental Property in 2022

Mackenzie Born — Mon, 10 Jan 2022 18:19:16 +0000

Increasing home prices and low housing inventory indicate a competitive market for homebuyers in 2022. But with rent prices and the demand for rental housing on the rise, one group of buyers may still be highly motivated and in a good position to purchase property: real estate investors.

Whether you’re looking to buy your first investment property or planning to add another to your portfolio, we’ve analyzed and ranked the largest 50 U.S. markets to invest based on affordability, appreciation, rental income, population growth, and even the share of tenants who pay their rent on time.

Based on Realtor.com® housing market and Avail rental market data, here are the best places to buy a rental property in 2022:

1. Columbus, Ohio

Ranking No. 1 as the best place to invest, Columbus is one of Ohio’s most populous and fastest-growing cities. With a lower cost of living, lively downtown neighborhoods, and an economy boosted by Ohio State University, Columbus has attracted remote workers and transplants from more expensive areas, especially during the pandemic.

Columbus ranked in the top 10 out of 50 metropolitan areas for best investment appreciation (No. 8) and best rental income growth (No. 6). Plus, Avail data shows that 90% of renters in Columbus paid their rent on time in 2021 — ranking No. 8 for highest share of on-time rent payments.

Best place to invest index score: 87.8
Median purchase price: $217,100
Median rental listing price: $1,540
Rental listing price growth: 4%

2. Orlando-Kissimmee-Sanford, Florida

Greater Orlando is known for its tourist attractions (like Walt Disney World and Universal Studios), but the metropolitan area attracts more than just visitors — Orlando.org reported that the region was welcoming 1,000 new residents per week from slower-growth states. Plus, over half of residents (55%) rent their homes, according to Zumper.

Florida has lower-than-average property taxes and no personal income tax, and the Greater Orlando area ranked No. 2 on our list for best investment appreciation and No. 7 for best rental income growth.

Best place to invest index score: 86.2
Median purchase price: $216,600
Median rental listing price: $1,380
Rental listing price growth: 3.6%

3. Las Vegas-Henderson-Paradise, Nevada

The Las Vegas-Henderson-Paradise desert offers a moderate winter climate, an economy driven by tourism from the Strip, and the most affordable housing market in our list of top 10 places to invest — especially compared to major cities nearby, like Los Angeles, Phoenix, and San Diego.

Home prices here soared to record-levels during the pandemic, mostly driven by out-of-state cash buyers and investors. While the market is especially competitive, many first-time homebuyers and non-investors have been forced to keep renting due to local competition, continuing the demand for rental properties in the region.

Best place to invest index score: 85.3
Median purchase price: $205,800
Median rental listing price: $1,174
Rental listing price growth: 2.7%

4. Raleigh, North Carolina

Raleigh is the second-fastest growing city out of the 50 metro areas we analyzed due to explosive population growth over the last several years. Part of the “Research Triangle” (consisting of Raleigh, Durham, and Chapel Hill), the area is known for its universities, greenspace, food scene, and craft breweries, helping it attract and sustain young and educated residents.

Raleigh ranked No. 4 on the Wall Street Journal/Realtor.com® 2021 Emerging Housing Market Index for both investors and homeowners, and Avail data shows that 92% of renters in Raleigh paid their rent on time in 2021 — ranking No. 4 for highest share of on-time rent payments.

Best place to invest index score: 84
Median purchase price: $220,600
Median rental listing price: $1,162
Rental listing price growth: 1.4%

5. Tampa-St. Petersburg-Clearwater, Florida

Sitting on Florida’s Gulf Coast, the Tampa Bay area offers coastal living and year-round warm weather. According to Redfin, real estate investors bought one in four homes in the Tampa metro area in the third quarter of 2021, and rent prices have surged more than most metros in the country — Realtor.com® reported a November rent increase of 39% year-over-year for the Tampa metro area, second only to Miami-Fort Lauderdale-West Palm Beach.

With lower-than-average state property taxes and no personal income tax, the Tampa-St. Petersburg-Clearwater metro area ranked No. 1 for best investment appreciation and No. 5 for best rental income growth.

Best place to invest index score: 83
Median purchase price: $364,200
Median rental listing price: $1,287
Rental listing price growth: 4.4%

6. Austin-Round Rock-Georgetown, Texas

The Greater Austin metro area has seen a massive spike in population over the last decade, ranking No. 1 for population growth out of all 50 cities and metropolitan areas we analyzed. Tech companies and transplants from California’s Silicon Valley have been famously relocating to Austin for years, but the city’s growth has been fueled by movers from all across the country.

The demand for housing in Austin is high, and in September of this year, rent prices had surged more than any other tech hub in the country. Austin is one of the top destinations for migrating talent, and according to 2019 Austin Chamber data, 66% of residents lived somewhere else a year earlier — making the area ideal for rentals.

Best place to invest index score: 80.8
Median purchase price: $360,100
Median rental listing price: $1,476
Rental listing price growth: 1.1%

7. Denver-Aurora-Lakewood, Colorado

Another rapidly-growing region, the Denver metropolitan area has seen an increase in population, cost of living, and rent prices. With its close proximity to Rocky Mountain National Park and the vibrant neighborhoods of Denver, the area offers a mix of outdoor recreation and city culture that attracts newcomers from around the U.S.

According to RentCafe, 51% of homes in Denver are renter-occupied, and the metro area ranked No. 4 on our list for best rental income growth.

Best place to invest index score: 80.7
Median purchase price: $374,400
Median rental listing price: $1,712
Rental listing price growth: 4.7%

8. Atlanta-Sandy Springs-Roswell, Georgia

Population growth, job growth, and affordability have helped the real estate market in metropolitan Atlanta thrive. While the demand for housing in metro Atlanta is high, the supply is low — especially for single family homes. Within the city of Atlanta itself, Zumper reports that 50% of residents rent their homes, with Gen Z and millennials making up over half of the city’s population.

According to Realtor.com®’s 2022 Housing Forecast data, price growth in the Atlanta metro area is projected to be 3.5% year-over-year — slightly higher than the national average. Metro Atlanta ranked No. 6 for best investment appreciation and No. 9 for best rental income growth.

Best place to invest index score: 80
Median purchase price: $269,000
Median rental listing price: $1,364
Rental listing price growth: 3.3%

9. Boston-Cambridge-Newton, Massachusetts/New Hampshire

Coming in at No. 9, Greater Boston is one of the pricier areas on our list to buy and rent. With an economy driven by higher education (Boston College, Harvard, and MIT are just a few of the notable universities in the area), healthcare, and finance, Greater Boston is home to both students and affluent professionals looking to rent.

Even as the pandemic drove renters out of major cities (Boston included), data shows many renters are returning to tech-based cities and rents are increasing once again. Boston rents are up 12.9% year-over-year, according to Realtor.com® November rental data, and the Greater Boston area ranked No. 4 for best rental income and No. 2 for best rental income growth.

Best place to invest index score: 80
Median purchase price: $1,012,400
Median rental listing price: $3,491
Rental listing price growth: 7.7%

10. Riverside-San Bernardino-Ontario, California

Referred to as the “Inland Empire,” the Riverside-San Bernardino-Ontario metro area is a hub for transportation and manufacturing. But its open space, proximity to the mountains, and more affordable housing options have attracted renters and homebuyers from the Los Angeles and Orange County areas — especially during the pandemic.

Like many other cities, the Riverside area saw surging rent increases in the last few months of 2021 — up 39% year-over-year and ranking No. 4 for metros with the fastest-growing rent in November, based on Realtor.com data.

Best place to invest index score: 79
Median purchase price: $392,000
Median rental listing price: $1,383
Rental listing price growth: 2.9%

Manage Rental Properties With Avail

No matter how big or small your rental portfolio, Avail can help make the renting process simple for landlords and their tenants. Find and screen tenants, create state-specific lease agreements, collect rent online, manage maintenance requests, and more — all in one place, free for unlimited rental units.

Create an account or log in to get started.

Metrics used: Data is based on Realtor.com®’s 2021 median purchase price and annualized growth, Avail 2019-2021 median rental listing prices with annualized growth, 2018-2019 U.S. Census population growth data, and Avail data showing the share of tenants who paid their rent by the end of each month in 2021.

The analysis was conducted based on the 50 largest metro areas in the U.S. Rankings for index score, investment affordability, investment appreciation, rental income, rental income growth, population growth, and share of on-time rent payments were determined using the above data.

The post Best Places to Buy a Rental Property in 2022 appeared first on Avail.

Rental Market Forecast: 2022

Mackenzie Born — Fri, 10 Dec 2021 20:42:47 +0000

After a year of rent lows, highs, and lingering affordability problems from the pandemic, 2022 is expected to bring new profitability and challenges to the rental market, based on the 2022 Realtor.com^® Housing Forecast and Avail rental market data.

We’ve outlined seven rental market predictions that renters, landlords, and real estate investors can expect to see in 2022.

1. Rent Prices Will Increase in a Competitive Market

Rent prices experienced major declines in some areas at the start of the pandemic, but rents have slowly returned to pre-pandemic levels in some markets and come soaring back in others. Recent data shows rents in major tech cities quickly rebounding as renters move back and steep rent growth in cities across the country.

Even though below-average rent growth continued into 2021, an increasing demand for rentals combined with low rental vacancy rates is expected to fuel the rental market heading into 2022. Realtor.com^® economists predict a 7.1% growth in national rent in the next 12 months, along with a much more competitive rental landscape.

2. There Will Be a Higher Demand for Rentals

Similar to rent prices, Realtor.com^® predicts that home prices and mortgage rates will keep rising in 2022. An increasingly competitive homebuying market means that those who can’t compete for a home will likely continue to rent, increasing the demand for rental units.

Realtor.com^® economists also note that those who moved in with family during the pandemic may be ready to move out and resume renting, forming a “new household” and adding to the demand for rental properties.

3. Renting Could Become Less Affordable Than Homebuying

Rent growth is predicted to outpace home sales price growth in 2022, and in some markets, renting may become the less-affordable option. In July of 2021, Realtor.com^® found that first-time homebuying was more affordable than renting in almost half of the nation’s largest markets. As rent prices surge, a similar trend may take hold in 2022.

It’s important to note that while homebuying may be more affordable than renting in some U.S. markets, renters may not be able to compete for a home in the 2022 housing climate, leaving them to contend with high prices of rent and more limited rental housing options.

4. Renters Will Be Looking for Larger Units

As the pandemic spurred the work-from-home era, renters sought out larger spaces to function as both a home and an office. And while some renters are going back into an office, the demand for larger rental units with more space hasn’t gone away. RentCafe reported that 36% of U.S. cities are building larger apartments and 2021 Realtor.com^® rental data shows that larger unit rents have gained the most momentum towards pre-pandemic levels.

While the demand for larger units is partially driven by those with the financial ability to pay for more space, Realtor.com^® notes that some renters may be moving into a larger space with roommates (versus paying for a studio or one bedroom) to save money on rent as the economy continues to recover.

5. Landlords May Raise Rent or Sell to Recoup Pandemic Losses

Landlords were faced with limited options to offset missed rent during the pandemic. While emergency rental assistance was implemented to help tenants cover rent and utility payments, Avail found that Emergency Rental Assistance programs are failing to help landlords and renters due to unclear eligibility guidelines.

To help recoup lost rental income, landlords may evict renters who are struggling with payments or sell their rental properties altogether. September 2021 data from Avail revealed that 23% of landlords surveyed were already considering pursuing an eviction, while over half of landlords surveyed would push for eviction if their tenants missed one or two months of rent in the future.

On the other hand, if landlords choose to sell their rental properties rather than evicting tenants to raise rent, the supply of rental housing could be further reduced.

6. Real Estate Investors Will Continue to Benefit

Renters may be up against increasing rent prices and a more competitive rental market, but property investors are expected to see return on existing investments in 2022. Rising home prices paired with increasing rent puts real estate investors in a promising position and may encourage some investors to add new properties to their portfolios, even as mortgage rates increase.

7. Rising Rents and Low Housing Supply May Hurt Renters Recovering From the Pandemic

In contrast, renters across the country continue to struggle financially. According to Avail data, 47% of renters surveyed had missed at least one rent payment since the start of the pandemic. As Emergency Rental Assistance programs fail to work as intended and eviction is once again a possibility for landlords, renters who can’t afford their rent (or can’t afford to pay back missed rent) may find themselves in a difficult position.

If these renters are evicted or their landlords decide to sell, renters who are already struggling financially face a competitive rental market with potentially higher rent prices.

To stay up to date with rental market trends and news, join our special reports mailing list or subscribe to our newsletter below.

The post Rental Market Forecast: 2022 appeared first on Avail.

National Rent Prices Reach New Highs Heading Into Winter Months

Mackenzie Born — Tue, 09 Nov 2021 19:25:45 +0000

Cities across the country are seeing surging increases in rent prices that are making up for lost time and major declines due to the pandemic. According to Realtor.com®’s September rental data, rent prices are increasing across the largest 50 metropolitan areas and tech hubs, bringing median rent to $1,654 and translating to renters paying an extra $198 per month.

Here’s a look at where rent prices stand going into the winter months and which areas are experiencing the biggest increase in rent overall.

Two-Bedroom Units Have the Fastest-Growing Rent Prices

Based on Realtor.com®’s most recent data, two-bedroom units have seen the biggest increase in rent price compared to one-bedroom and studio units. Pandemic-inspired preferences for more space coupled with renters’ increasing desire for larger homes has helped the median monthly rent for two-bedroom units increase by $233 — bringing the national median rent to $1,855, about 14% higher than last year.

Due to a demand for more space, 36% of cities are building larger apartments, with spaces increasing by an average of 50 square feet.

While rent prices for two-bedroom units have experienced the biggest increase nationally, studio and one-bedroom units have driven the most growth in tech cities like San Francisco and New York, where more young and single workers are opting for smaller units due to higher than average two-bedroom unit prices.

The median rent price for a one-bedroom increased by $185 a month to reach $1,542 nationally, with studios increasing by $137 to reach $1,351.

Rents in Major Tech Cities Are Rebounding as Renters Move Back

The pandemic caused renters to leave major cities in search of more affordable and spacious housing, but those same renters are now returning as more cities and company offices reopen. While rents in major cities declined as much as 15% throughout the pandemic due to a lack of demand, rent prices have bounced back in tech cities like Austin, San Jose, and Seattle.

Rent prices in these major cities are up by 7.6% on average, which is the fastest growth rate on record. Four of the 10 major tech counties (in Los Angeles, Seattle, Denver, and Austin) reached their highest rents to date with no clear signs of slowing down anytime soon, according to Realtor.com®’s analysis.

Tech cities with biggest median rent increases (compared to September 2020):

Austin, Texas: $1,695 – up 25.6%
Seattle, Washington: $2,220 – up 17.9%
Denver, Colorado: $2,034 – up 13.8%
Santa Clara/San Jose, California: $3,015 – up 10.8%
San Francisco, California: $3,450 – up 9.5%

Florida Metro Areas Saw the Biggest Rent Increases in the Country

Tech hubs aren’t the only areas seeing notable spikes in rent prices. While many metropolitan regions saw rent hold steady or decline throughout the pandemic, metro areas across the U.S. have experienced surges in rent compared to September 2020. National rent increased by 13.6% year over year, and according to Realtor.com®, is growing four times faster than rates seen just before the pandemic hit the U.S.

Florida saw the two highest rent increases by metro area in the country, with the Tampa-St. Petersburg-Clearwater metro area increasing by 33.3% year over year and the Miami-Fort Lauderdale-West Palm Beach metro area increasing by 31.6% year over year.

States with highest rent increases by metro area (compared to September 2020):

Florida (Tampa-St. Petersburg-Clearwater): $1,800 — 33.3% increase
Florida (Miami-Fort Lauderdale-West Palm Beach): $2,500 — 31.6% increase
California (Riverside-San Bernardino-Ontario): $2,245 — 26.5% increase
Arizona (Phoenix-Mesa-Scottsdale): $1,700 — 26.4% increase
Nevada (Las Vegas-Henderson-Paradise): $1,548 — 25.9% increase

As Rents Increase, Rental Housing Uncertainty Looms

As rents reach record highs in areas across the country, many renters are still faced with housing uncertainty as a result of the pandemic. According to recent Avail data, Emergency Rental Assistance programs are failing to help renters and landlords as intended, and renters face an increased chance of being evicted from the homes they are already having trouble affording.

To stay up to date with national rent data, rental market news and trends, and the state of the rental market as it recovers from the pandemic, join our special reports mailing list or sign up for our newsletter below.

The post National Rent Prices Reach New Highs Heading Into Winter Months appeared first on Avail.

Avail Data Powers New National Rental Payment Tracker

Mackenzie Born — Tue, 14 Sep 2021 15:42:30 +0000

As financial hardships brought on by the COVID-19 pandemic extend into the fall of 2021, Avail is using its rent payment data to shed light on how rental households in one- to four-unit properties are faring economically.

These independently-owned rentals make up nearly half of the U.S. rental market and have been some of the hardest hit in the pandemic rental crisis. But a lack of necessary data and attention has mostly left these landlords and renters out of the national conversation.

In partnership with Urban Institute, Avail is leveraging its administrative data on rent payments in one- to four-unit rental properties, providing rental payment information dating back to January 2020 to help inform policymakers at the local, state, and national levels.

“Avail is in the unique position to provide insights on the non-institutional side of the rental housing market,” said Avail CEO Ryan Coon. “Our platform serves more than 40,000 properties across the entire United States, including the most populous metropolitan statistical areas by renter population, so we’re able to provide data that would be otherwise unavailable.”

Along with general insights into monthly rent payments, including full and partial payments, Avail also provides data filtered by metropolitan statistical area (MSA), by unit portfolio size, and by units where renters are below the bottom 20% of the price distribution.

Landlords and renters who own and rent smaller-unit properties tend to have lower incomes and be households of color. Urban Institute found that owners of two- to four-unit buildings earn less than owners of single-family or multifamily buildings, are more vulnerable to economic disruption caused by the pandemic, and are more likely to be owners of color. Similarly, renters in two- to four-unit buildings have the lowest income by property type (compared to single-family, multifamily, and large apartment buildings), with 44% being renters of color.

“Mom and pop landlords and their tenants have struggled more than institutional landlords and their tenants throughout the pandemic,” said Jung Hyun Choi, senior research associate at the Urban Institute. “One troubling illustration of this is that renters who pay the lowest rents have been the least likely to make their payments on time, and their on-time payment rates are still declining.”

Avail will continue to supply updated rental payment information gathered through periodic surveying of landlords and renters across the U.S., which has already provided much-needed insights on mortgage forbearance, the use of government aid, and a lack of knowledge about emergency rental assistance.

Stay up to date with industry news, rental market reports, and updated data by joining our special reports mailing list.

The post Avail Data Powers New National Rental Payment Tracker appeared first on Avail.

Where to Post a Rental Listing Online for Free

Mackenzie Born — Wed, 17 Mar 2021 20:59:15 +0000

Posting your rental listing online is the first step to getting new renters into your property. But due to the high amount of rental property competition, it really does matter where you’re advertising your rental property.

For that reason, we provided a guide on the best rental listing sites and how to post your rental listing to those sites for free, all at once.

Where Should You Post Your Rental Listing?

To find the best renters for your unit, you’ll want to maximize exposure to your rental listing. First, you’ll want to create a rental listing that stands out and markets the right aspects of your property. Your listing should include a title, description, and high-quality photos. Here is an example of a Chicago-based rental listing description:

“City Skyline Views: Charming, well-lit 3 bedroom 2 bathroom apartment in Old Town neighborhood. Close to the red line, shops and nightlife on Wells Street, and walking distance from Whole Foods. Balcony for entertaining, hardwood flooring throughout.”

Next, you’ll want to post that listing across the top rental sites that are most frequented by prospective renters — sites like Realtor.com®, HotPads, Zumper, and Apartments.com, to name a few. The more listing sites you post your rental to, the more qualified renters will come across your listing.

You can manually post to each site or leverage landlord software like Avail to simplify the process. For example, Avail allows you to get your rental on Zumper, Apartments.com, Realtor.com®, PadMapper, Apartment List, Walk Score, Doorsteps, and more with one click. Our system will also generate a rental listing title and description to ensure you attract great tenants.

Prospective leads can request property showings and an application directly through the platform, allowing you to keep everything organized. Syndicated listings with Avail are free and unlimited — meaning you can post as many listings as you want, free of charge.

What Should You Look for in a Rental Listing Site?

Besides selecting rental listing platforms that get the most views from prospective renters, you’ll also want to make sure that you’re selecting a listing platform that:

Is trustworthy and secure
Will attract qualified renters
Is free to post rental listings

A big portion of selecting a great renter generally falls on the landlord during the tenant screening process, but some platforms can help attract more qualified renters than others. A site like Craigslist, while one of the better-known options for finding a rental, is also one of the least regulated and is known for rental scams.

Posting a rental listing online for free is another essential for many landlords. Most rental listing sites allow you to post for free, but some may charge for posting a rental listing to their platform.

How to Post Your Rental Listing Across Multiple Sites for Free

If you’re ready to market your rental property, we outlined the main steps to advertising your rental listing with Avail.

Create an account: You can create an account for free to advertise your rental, as well as access other features. Avail is free for unlimited units, but you can upgrade to Unlimited Plus to access features like lease cloning, waived ACH fees, and more.
Add your rental property: Set up your rental property by adding the full address and type of property.
Click on “Listings” to input the requested information: Add the information you want to show on your listing. Our system automatically generates titles and descriptions based on the provided information, but you can edit it to your liking. Also make sure to upload high-quality photos of your property and add virtual tours.
Publish once ready: Once you’ve finalized your listing, press publish.*

Find Great Renters With Avail

There are various ways to post your rental listing online for free, so the key is knowing where to look. With Avail, you can find great renters in no time by advertising your rental across the top dozen rental sites.

All you need to do is create an account, set up your rental properties, and create an online rental listing.

The post Where to Post a Rental Listing Online for Free appeared first on Avail.

Avail Ranks No. 970 on the 2020 Inc. 5000 List

Mackenzie Born — Wed, 12 Aug 2020 19:10:56 +0000

Inc. Magazine has announced that Avail ranked No. 970 on this year’s Inc. 5000 list. The annual list represents the fastest-growing private companies in America and identifies some of the most successful independent businesses across all industries, including healthcare, real estate, software, media, hospitality, and more.

According to Inc., this year’s list showed high competition and staggering growth from nominated companies compared to previous years. Companies that made the list have grown sixfold since 2016 on average, and the 2020 Inc. 5000 achieved a three-year average growth of over 500%. The Inc. 5000’s aggregate revenue was $209 billion in 2019, accounting for over 1 million jobs over the past three years.

“We’re honored to be recognized on the Inc. 5000 list of fastest-growing companies,” said Avail CEO Ryan Coon. “This recognition is validation of the valuable work our entire team does every day to simplify and improve the rental experience for landlords and renters across the United States.”

Based in Chicago, Avail is the leading management and rent payments platform for DIY landlords and renters, and has experienced breakout growth as landlords and renters look for a contactless rental experience.

In July, Avail closed a $4.2 million Series A round of funding, accelerating the company’s position as a leader in the rental management space. Avail has expanded its team significantly in the last year despite economic challenges, adding employees across their marketing, product, engineering, and customer success teams.

Avail streamlines the rental process by providing tools for all stages of renting, from online tenant screening and background checks, digital leases, online rent payments, and maintenance tracking. The platform allows landlords and renters to move through the entire rental process digitally and contactlessly, which has been especially advantageous for landlords and their renters during the COVID-19 pandemic.

Avail has raised $9.7 million to date, and has a full-time team of 29 employees based in Chicago. The company is actively hiring for marketing, customer success, product management, and engineering roles.

More About the Inc. 5000

The 2020 Inc. 5000 is ranked according to percentage revenue growth when comparing 2016 and 2019. To qualify, companies must have been founded and generating revenue by March 31, 2016. They had to be U.S.-based, privately held, for-profit, and independent — not subsidiaries or divisions of other companies — as of December 31, 2019. (Since then, a number of companies on the list have gone public or been acquired.)

The minimum revenue required for 2016 is $100,000; the minimum for 2019 is $2 million. As always, Inc. reserves the right to decline applicants for subjective reasons. Companies on the Inc. 500 are featured in Inc.’s September issue.

Complete results of the 2020 Inc. 5000 can be found at https://www.inc.com/inc5000, including company profiles and an interactive database that can be sorted by industry, region, and other criteria.

The post Avail Ranks No. 970 on the 2020 Inc. 5000 List appeared first on Avail.

Should You Collect Rent With Zelle, Venmo, PayPal, or Avail?

Mackenzie Born — Fri, 07 Aug 2020 15:29:06 +0000

There are a handful of convenient ways to collect rent online, but they’re not all created equal. Before you commit to a payment platform, know which ones have fees, the transfer limits, and what each platform allows when you’re paying and collecting rent.

Collecting Rent With Zelle

Zelle is a payment platform that lets you send money between bank accounts without fees. This platform is mainly used to send and receive money from friends, family, or other trusted people, but it is also used for online rent collection.

1. Payments

Zelle offers quick processing times and does not charge fees to use. Funds will show up in your account instantly, but it can take around one business day for the money to clear. There aren’t any fees to send or receive money, but Zelle limits transfer to around $1,000 a day and $5,000 a month, depending on your bank.

2. Ease of Use

Zelle doesn’t partner with every bank, and if a tenant’s bank or credit union doesn’t offer Zelle, the weekly send limit is $500. Landlords can request rent payments, but automatic, recurring payments can only be set up if the tenant’s associated bank supports them.

3. Using Zelle for Rent Collection

While Zelle offers ease and convenience, it is not intended for rent collection, so there are limitations to this platform to know of. For one, Zelle does not issue 1099-K forms or report any transactions that total more than $600. With the 1099 requirement, the Internal Revenue Service (IRS) will require landlords to report rental income exceeding $600 versus $20,000. You can manually track each payment with a spreadsheet, but this can require too much time, especially if you receive rent from more than one tenant.

Additionally, Zelle does not allow you to set up automatic late fees or stop payments from a tenant you’re evicting. The ability for tenants to make full or partial payments at any time using Zelle can be problematic — especially during an eviction. Accepting a payment as small as $1 can stop eviction altogether.

Overall, Zelle may be a short-term solution to online rent collection. But if you plan on collecting over $20,000 in payments, it’s best to find a different platform designed for rent collection.

Collecting Rent With Venmo

The payment app is best known for peer-to-peer payments, but Venmo allows for rent collection. Venmo charges fees for business transactions and, more recently, any payment identified as “goods and services” — two categories under which rent collection may fall.

1. Payments

Like Zelle, Venmo transactions show up in your account instantly, but payments take one to three days to process. Initially, there’s a $299.99 limit on Venmo transfers, but after the user’s identity is confirmed, the limit is comparably high at $2,999.99 per week. Note that the user has to go through extra steps to verify their identity and raise their weekly limit.

2. Ease of Use

Both parties just need the Venmo app to send and receive payments. Landlords can request rent payments from tenants, but keep in mind that rent payments likely need to be classified as a business transaction, which comes with a 3% fee.

If you’re labeling rent payments as “goods and services,” Venmo now charges a fee of about 2% for these transactions, too. Venmo will cancel accounts that try to disguise business transactions as personal ones.

3. Using Venmo for Rent Collection

Venmo is a quick, user-friendly way to make payments, but it was built for easily paying people you know. There’s no option for recurring, automatic payments or late fees, and like Zelle, a landlord cannot stop or decline a payment.

Keep in mind that there aren’t any protections for landlords or tenants when sending rent money through Venmo. If a tenant sends their rent to the wrong person, Venmo won’t refund the money to the tenant or redirect it to the landlord.

On the bright side, Venmo does provide a 1099-K form if you receive more than $600 for sales of goods and services — which in this case, would be rent.

Collecting Rent With PayPal

Rent can be paid and collected through PayPal, but similar to Venmo, there’s a fee of about 3% for each business transaction. PayPal requires that all money for goods and services (which includes rent) are accepted through a business account.

1. Payments

Once an account is verified, PayPal doesn’t cap the total amount of money that can be sent. According to PayPal’s Help Center, a user can send up to $60,000 (but may be limited to $10,000) in a single transaction. Keep in mind that when you’re paid, the money goes into your PayPal account, not directly into a bank account.

2. Ease of Use

Both parties need to set up PayPal accounts to send and receive money. Users have the option to pay with a bank account, debit card, credit card, or directly from their PayPal account balance, and transactions typically take from 30 minutes up to one business day to process.

3. Using PayPal for Rent Collection

While the platform is good for sending large sums of money, note that PayPal will flag and sometimes freeze accounts with irregular activity. Keep this in mind if you’re receiving multiple rent-associated payments in a single transaction. PayPal also offers more protections than Venmo in that they’ll usually refund money if there’s a valid dispute, but this can sometimes take weeks.

Tenants can dispute transactions through PayPal. When payment issues arise, the platform will often side with the payer (or in this case, the tenant). If you collect more than $600 through PayPal, you will receive a 1099-K form to report to the IRS.

Collecting Rent With Avail

Avail (part of Realtor.com®) is a rent collection app specifically designed for online rent collection. Features like the option to set up automated rent reminders and payment tracking can help make the process more streamlined. Tenants can also benefit from paying rent with Avail, which can help encourage on-time payments.

1. Payments

Once you enter the lease details, the rent amount, and the tenant’s name and email, our system helps the tenant get set up to pay their rent online.There is a 3.5% processing fee for credit and debit card payments, and a $2.50 transaction fee for bank transfers.

Payments are deposited directly into the landlord’s account within three to five business days. For faster processing times and waived ACH fees, you can upgrade to Unlimited Plus to leverage FastPay to have rent payments deposited to your account as soon as the next day and more.

2. Ease of Use

Landlords can invite their tenants to sign up for a free Avail account. Both parties have electronic access to important rental payment information through their account, including scheduled rent payments and payment history, payment tracking, and rent receipts. Avail is optimized for mobile use, so you can easily access your account from your phone or another smart device.

3. Using Avail for Rent Collection

Because the Avail online rent tool was designed specifically for rent payments, it offers features other payment platforms don’t — like the ability for tenants to turn on Autopay or report on-time rent payments to TransUnion. Landlords can also set up payment schedules, automate late fees, set reminder emails about upcoming rent, and amend or cancel future rent payments. Landlords that collect more than $600 in payments will receive a 1099-K form.

An additional benefit to Avail rent collection is that you can also track rental income and expenses for free. The Rental Property Accounting tool automatically populates collected payments and logged maintenance costs to track your finances. For payments collected outside of Avail, you can manually input them and upload relevant receipts for future reference.

Avail offers live customer support seven days a week, so if either you or your tenant has an issue, someone from the Avail team is always available to help you solve it.

Rent Collection Made Easy

Each platform offers its pros and cons, but it’s best to choose an option to help you make rent collection more manageable. To get started with Avail, create an account for free to set up your rental properties and tenants. Once you set up your account, you can take advantage of all the different features to save time and money as a landlord.

Already have an account? Log in here.

The post Should You Collect Rent With Zelle, Venmo, PayPal, or Avail? appeared first on Avail.