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Little Change In Rents As Tenants Settle In For Winter

By
John Triplett
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There was little change in rents in November as moving season is past and tenants settle in for the winter, Yardi Matrix says.

There was little change in rents as moving season is past and tenants settle in for the winter, Yardi Matrix says in the November Multifamily Report.

Of the last 10 Novembers, since 2015, the average U.S. advertised rent has changed more than $3 only three times.

Highlights from the report:

  • Multifamily advertised rents dropped $5 nationally in November to $1,744, as a rapid influx of supply continues to counteract strong demand in high-growth Sun Belt markets. Year-over-year rent growth fell 10 basis points to 0.9%.
  • Nationally, rent growth has been steady at just under 1.0% throughout the year, but performance is mixed by region. Sixteen of the Matrix top 30 metros have recorded positive advertised rent growth year-over-year, while 14 are negative.
  • Due to a seasonal slowdown and rising competition from deliveries, particularly in Florida and Texas, single-family rental rates are slumping. SFR advertised rents dropped $7 month-over-month in November to $2,150, and are down $25 since peaking during the summer.

The report says the question is whether the recent calm “belies a more turbulent time ahead as the multifamily industry anticipates changes to policy and interest rates.”

Clearly any talk of rent control at the federal level is gone, the report says.

Also, corporate tax breaks for real estate and deductions for pass-through entities from the 2017 tax law are likely to be extended or expanded.

Too, Fannie Mae and Freddie Mac, the most active multifamily lenders will likely face change based on previous statements from the Trump administration.

“At the same time, threats to implement steep tariffs and deport immigrants that comprise a solid chunk of construction workers raise concerns about rising costs, development delays and reduced demand for housing. Higher inflation could keep interest rates elevated and potentially stall increased transaction activity,” Yardi Matrix says in the report.

Read the full Yardi Matrix report here.

About Yardi Matrix

Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149.

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4 Ways AI is Transforming the Multifamily Housing Industry

By
By The Editors
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4 Ways AI is being leveraged by multifamily owners and operators to optimize their marketing efforts from leasing to maintenance

4 Ways AI is being leveraged by multifamily owners and operators to optimize their marketing efforts from leasing to maintenance.

By Vickie Rodgers

Artificial intelligence (AI) is rewriting how the entire real estate industry operates, including improving the way multifamily properties market and advertise their residences. In fact, McKinsey predicts generative AI alone can create at least $110 billion to $180 billion in value for the entire real estate industry.

Property managers failing to invest in and adopt AI risk falling behind those in the industry that leverage the tool in their marketing and advertising efforts.

Although AI is not new technology, it has gone through a renaissance since ChatGPT popularized it in 2022. AI is not only here to stay, it is set to take root, grow and mature in the multifamily market because of the many tangible benefits it provides, including increasing marketing efficiency and improving resident satisfaction.

Here are four ways AI is being leveraged by multifamily owners and operators to optimize their marketing efforts.

No. 1 – Streamline the leasing and application processes

AI can help those on both sides of the leasing and application process – leasing office and prospective residents.

For leasing office team members, AI can be used to craft engaging apartment listings, which frees them from this manual task so they can focus on other efforts, such as spending one-on-one time with tenants or prospects. AI can even be used to create an image replacing an outgoing tenant’s dated furniture with AI-generated furnishings that make the space more appealing.

On the prospective resident side, a chatbot can answer questions 24/7 so the individual doesn’t need to wait for business hours to get an answer. Chatbots can also be used to schedule viewings or lead potential tenants through the application process, among other things.

No. 2 – Support stronger marketing activities

AI sets the competitive multifamily resident bar higher. For instance, if one property manager advertises a dimly lit, unappealing snapshot of an available unit and another provides a well-lit, AI-enhanced photo showing the property in a more engaging way, the second property is going to attract more prospects.

To reach the most relevant audiences, AI algorithms can also use targeted advertising to analyze certain demographics to optimize ad placements. The technology can also evaluate and prioritize leads based on conversion likelihood so leasing teams can focus their efforts on the prospective residents with the greatest leasing potential.

No. 3 – Analyze amenities and provide recommendations for upgrades

No two properties are the same, nor are their amenities. Consider swimming pools since many apartment complexes have them. AI can analyze and then point out that a property has invested in a high-end Infiniti pool that’s much more desirable than a competitor with a swimming pool installed in the 1980s.

AI can even recognize patterns in data to determine which amenities, like weight rooms, pools, greenspaces or smart home features, have the most appeal with tenants. If tenants lean toward reliable Wi-Fi throughout an entire property or would love an on-site dog park, AI can recommend these upgrades to property management.

No. 4 – Strengthen preventative maintenance operations through real-time monitoring

AI algorithms analyze data from sensors and historical maintenance records to predict when equipment might fail. This allows organizations to schedule maintenance before problems arise to decrease equipment downtime and increase tenant satisfaction.

AI can identify atypical patterns in real-time data, signaling potential issues before they escalate. For example, if water usage throughout a property doubles over two months, proactively looking into the issue can help address the problem, like detecting a water tank trickle or swimming pool leak, early. Similarly, if the refrigerator in a unit is acting up, AI can schedule maintenance before the appliance fails and the tenant is forced to throw out a refrigerator and freezer full of food.

AI set to unlock even greater potential

Although AI still has some growing pains, using the technology to enhance marketing and advertising efforts can help multifamily operators take advantage of greater efficiency, insight and innovation. As the technology grows and matures, it will be interesting to see the ways in which AI continues to redefine the possibilities in the growing multifamily market.

 About the author:

Vickie Rodgers, Senior Vice President of Cox Communities

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Rents Forecast to Rise in 2025 and 2026

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Insurance Leads Rising Rental Property Expenses

Photo credit CHOLTICHA KRANJUMNONG via istockimages

Multifamily Applicant Fraud Becoming a Widespread Challenge

By
John Triplett
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Multifamily fraud is becoming a challenge as fraudsters become more inventive to avoid vulnerabilities in traditional verification systems

Multifamily applicant fraud is becoming a widespread challenge for the industry as fraudsters become more inventive, according to the State of Applicant Fraud Report from Snappt, an AI document-fraud-detection company for multifamily property managers.

The report exposes the alarming rise of sophisticated fraud tactics targeting multifamily properties, highlights vulnerabilities in traditional verification systems, and introduces actionable solutions to protect your business, according to a release.

Using AI To Sneak Through Leasing Process

The release says fraudsters employ a range of tactics to sneak through the leasing process:

  • Some manipulate documents directly in the form of first-party fraud
  • Others take a third-party fraud approach by impersonating another individual on their documents
  • In addition, applicants are utilizing AI technology to generate entirely fake documents and synthetic IDs from scratch.

Multifamily applicant fraud is becoming a challenge as fraudsters become more inventive to avoid traditional verification systems

These tactics come at a time of high housing demand and the climbing rate of rental costs. In tandem, the digitization of rental applications has made it easier for applicants to remotely submit falsified documents, making it harder for property managers to verify their authenticity.

As part of this report, Snappt surveyed 900 property managers to gain insights into their daily challenges. They learned that 72% believe that multifamily applicant fraud is just as much of a problem this year as last, while more than 60% ranked security and accuracy as their top priorities.

Multifamily applicant fraud is becoming a challenge as fraudsters become more inventive to avoid traditional verification systems

The release says multifamily organizations must invest in a multi-layer fraud-defense system equipped with document-fraud detection, ID verification, income verification, threat-list checks, and a fraud forensics team.

“Fraud is evolving at an unprecedented rate, putting immense pressure on multifamily property managers to keep up,” writes Daniel Berlind, CEO of Snappt, in the release. “Our latest report and new solutions empower the industry to tackle fraud head-on while maintaining a frictionless application process for prospective renters.”

To read the report, visit www.snappt.com/blog/applicant-fraud-report.

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Aggressive, Abusive Tenants Big Challenge for Property Managers

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Why People Moved In The Last Year – Fewest In 25 Years

By
John Triplett
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A new study on why people moved confirms that the main reasons people move are for better housing and jobs, according to Rent Café.

A new study on why people move confirms that the main reasons people move are for better housing and jobs, according to Rent Café.

The number of people moving last year – 24 million – was the lowest number in 25 years.

More than half of those who moved last year (13 million) packed up for better housing. Another five million chased job opportunities.

Overall, the pursuit of better homes represented 15% of all moves, along with the search for more affordable housing, which drove 10% of relocations.

“Instead of compromising more, Americans are now strategically relocating to balance career opportunities with quality-of-life and housing costs,” the RentCafe research team writes.

A new study on why people moved confirms that the main reasons people move are for better housing and jobs, according to Rent Café.

This trend reveals how housing and career choices continue to reshape America’s cities, the study says.

“This trend reveals an intriguing paradox of the remote-work era: Despite the widespread adoption of work-from-home policies, job-related relocations remain strong.

“It suggests that workers are leveraging the flexibility of remote work to seize career opportunities across broader geographic areas. This trend aligns with the post-2020 job-hopping phenomenon, in which nearly one in five workers stayed in their role for a year or less by 2022. Plus, an easier commute drove more than 5% of all moves last year, which reinforces the paradox,” RentCafe says in the study.

A new study on why people moved confirms that the main reasons people move are for better housing and jobs, according to Rent Café.

Solo renters fasting moving group

While moving out and living on one’s own seems to be less appealing or achievable compared to pre-pandemic times, solo renters are the fastest-rising renting group.

Then, cheaper housing comes in as the fourth most popular reason for relocating, with a share of nearly 10%. This is far from unexpected in the context of record-high home prices.

A new study on why people moved confirms that the main reasons people move are for better housing and jobs, according to Rent Café.

A few highlights from the report:

  • 7% of Americans who moved last year did so to achieve homeowner status.
  • 6% of movers sought a better neighborhood.
  • 8% of moves were for health concerns.
  • 4% of moves for retirement
  • 1% of moves were for a change of climate

Read the full report from RentCafe here.

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Insurance Leads Rising Rental Property Expenses

Can I Use Pet Deposit Money To Pay For Other Rental Damages?

By
Hank Rossi
-
Can a landlord use pet deposit money to pay for other tenant rental damages is the question this week for Ask Landlord Hank.

Can a landlord use pet deposit money to pay for other tenant rental damages is the question this week for Ask Landlord Hank. Remember Hank is not an attorney and he is not offering legal advice. If you have a landlord question for him please fill out the form below.

Dear Landlord Hank,

I have a tenant that left before we did the walkthrough. The place was full of old beds, sofas, broken cabinets and wood pallets, and loads of garbage. It took multiple trips to the dump.

She is asking for her pet deposit back. However,  it is going to cost me $1,000 just for garbage and junk removal. She paid $500 plus $100 pet fee. Can I hold her pet fee or is that only for pet damage?

-Elaine

Hi Elaine,

From your question, I am guessing you have a refundable pet deposit for any damage caused by the pet.

That is the intention for the use of these funds, for pet stains or damage to carpet or other flooring, scratches or chewing on walls, cabinets, etc., pet smells, fleas – any issues related to keeping this animal in the unit.

If you can tell that some of the damage was caused by the pet, you can keep money to take care of that issue.

If you have a pet fee then that is normally a fee paid by the tenant for the right to have the pet in the property. Normally a pet fee is nonrefundable, but your lease should describe whether you have-a refundable pet deposit or non-refundable pet fee.

I hope you are doing background screening on possible tenants to check credit, criminal history, employment history and residential history to hopefully avoid this kind of abuse in the future.

Good luck!

Sincerely,

Hank Rossi

As a child, Hank Rossi sometimes helped his father take care of the family rental-maintenance business.  In the mid-’90s he got into the rental business for himself. After he retired, he started a real-estate brokerage business with his sister that focuses on property management and leasing. Visit his website: https://rentsrq.com.

Editor’s note: Check your local laws on vehicles on rental property or other issues as many cities and states have different rules.

Can a landlord use pet deposit money to pay for other tenant rental damages is the question this week for Ask Landlord Hank.
Landlord Hank says, “If you can tell that some of the damage was caused by the pet, you can keep money to take care of that issue.”

Ask Landlord Hank Your Question

Ask veteran landlord and property manager Hank Rossi your questions from tenant screening to leases to pets and more! He provides answers each week to landlords.

  • This field is for validation purposes and should be left unchanged.

Each week I answer questions from landlords and property managers across the country in my “Dear Landlord Hank” blog in the digital magazine Rental Housing Journal.   https://rentalhousingjournal.com/asklandlordhank/

Tenants With Too Many Vehicles What Can I Do?

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photo credit Solovyova via istockimages

 

California Cities Push Back on Rent-Setting Software

By
John Triplett
-
California cities including San Diego are pushing back on rent-setting software programs used by apartments, according to reports.

California cities, including San Diego, are pushing back on rent-setting software programs used by apartments, according to reports.

Some landlords use a single company’s software – which uses an algorithm based on proprietary lease information – to help set rent prices.

San Diego’s city council president is the latest city to join the movement, proposing to prevent local apartment owners from using the pricing software, which he maintains is driving up housing costs.

The proposed ordinance, now being drafted by the San Diego city attorney, comes after San Francisco supervisors in July enacted a similar, first-in-the-nation ban. It put the ban in place on “the sale or use of algorithmic devices to set rents or manage occupancy levels” for residences. San Jose is considering a similar approach.

The San Diego council president, Sean Elo-Rivera, explained it like this to ABC eyewitness news:
“In the simplest terms, what this platform is doing is providing what we think of as that dark, smoky room for big companies to get together and set prices,” he said. “The technology is being used as a way of keeping an arm’s length from one big company to the other. But that’s an illusion.”

San Diego has the fourth-highest percentage of renters of any major city in the nation.

Arizona and 7 other states have sued also

California and seven other states have also filed lawsuits against the leading rental pricing platform, Texas-based RealPage. The complaint alleges that “RealPage is an algorithmic intermediary that collects, combines, and exploits landlords’ competitively sensitive information. And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices…”

A RealPage spokesperson, Jennifer Bowcock, told CalMatters that a lack of housing supply, not the company’s technology, is the real problem .

She said its technology benefits residents, property managers, and others associated with the rental market. She later wrote that a ” misplaced focus on nonpublic information is a distraction… that will only make San Francisco and San Diego’s historical problems worse.”

The California Justice Department contends RealPage artificially inflated prices to keep them above a certain minimum level. Department spokesperson Elissa Perez this was particularly harmful given the high cost of housing in the state. “The illegally maintained profits that result from these price-alignment schemes come out of the pockets of the people that can least afford it.”

Arizona AG Sues RealPage and Landlords For Price-Fixing

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Justice Department Sues RealPage Over Apartment Pricing

Photo credit Cavan Images via istockphoto

National Rents Dip Again In November

By
John Triplett
-
National rents dipped again in November dropping 0.8% and experts expect them to continue to fall in coming months Apartment List says

National rents dipped again in November dropping 0.8% and experts expect them to continue to fall in coming months, Apartment List says in the December report.

Nationwide rent fell $12 to $1,382, and “we’re likely to see that number dip one more time before the year ends,” the Apartment List research team says.

The analysis says, “The seasonal declines in rent prices that take place during the fall and winter have been steeper than usual and seasonal increases of the spring and summer have been milder. As a result, apartments are on average slightly cheaper today than they were one year ago.”

National rents dipped again in November dropping 0.8% and experts expect them to continue to fall in coming months Apartment List says

What is happening is that the influx of new supply has collided with softer demand over the past two years. This has caused rents to increase modestly during the peak moving season, and have seen more pronounced dips during the off-season.

Still, national rents are $200 a month higher than just a few years ago.

Overall rents are down 0.6% year-over-year as November brought the fourth consecutive and largest monthly dip of the off-season.

In November 88 of the nation’s 100 largest cities saw rents fall, in line with the broader national trend. But on a year-over-year basis, rent growth was negative for just 47 of these cities, as more individual markets gradually return to positive rent growth.

National rents dipped again in November dropping 0.8% and experts expect them to continue to fall in coming months Apartment List says

“We are likely to see continued price dips to close out the year, as property owners offer modest discounts to fill vacancies during a time of year when fewer renters are looking to move,” Apartment List says.

Apartment vacancies remain elevated

The Apartment List national vacancy index continues trending up slowly and sits at 6.8 percent, the highest reading since the onset of the pandemic

This rise in the vacancy rate is coming on the heels of the strongest quarter for new apartment completions in five decades as 180,000 thousand new apartments hit the market in the third quarter, a 21 percent increase over the previous quarter and the most since 1974.

However, keep in mind vacancy trends can be highly localized.

National rents dipped again in November dropping 0.8% and experts expect them to continue to fall in coming months Apartment List says

Conclusion

Rents should continue to dip for the remainder of the year.

Rent increases are currently being moderated by a robust construction pipeline that has already delivered a decades-high number of new apartment units in 2024, with considerable runway still to go in the boom.

“While rental demand has bounced back a bit this year, recent signs of labor market softness could dampen demand going forward. With this in mind, we expect that new supply will continue to outstrip demand into 2025,” Apartment List researchers say.

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Justice Department Sues Rental Property Owner for Sexual Harassment

By
John Triplett
-
Justice Department Sues Rental Property Owner for Sexual Harassment

The Justice Department has filed a lawsuit against Joseph E. Johnson the owner and operator of rental properties in Lexington, Kentucky, for engaging in sexual harassment and retaliation in violation of the Fair Housing Act, according to a release.

The lawsuit filed in the U.S. District Court for the Eastern District of Kentucky alleges that, for decades, Johnson has sexually harassed numerous female tenants.

According to the complaint:

  • Johnson has offered housing-related benefits in exchange for sexual contact
  • Made unwelcome sexual comments and advances to female tenants
  • Subjected female tenants to unwelcome touching and groping
  • Taken adverse housing-related actions against female tenants who refused his sexual advances
  • Failed to act when made aware of similar harassing behavior by one or more of his employees.

“For decades, this landlord used his position of power to sexually harass vulnerable women who simply wanted roofs over their heads,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said in the release. “Women should not live in fear when they pay their rent or seek repairs. The Justice Department will continue to vigorously enforce the Fair Housing Act’s prohibition on this conduct.”

The lawsuit, which is the result of a joint investigative effort of the Justice Department with the Department of Housing and Urban Development (HUD)’s Office of Inspector General, seeks monetary damages to compensate persons harmed by the alleged harassment, a civil penalty against the defendant to vindicate the public interest and a court order barring future discrimination.

“It is unacceptable for landlords to threaten or commit sexual harassment or abuse against tenants,” said HUD Inspector General Rae Oliver Davis. “The defendant allegedly preyed upon vulnerable tenants and retaliated against them when they spurned his sexual advances. My office will continue to work with our law enforcement partners to hold housing providers accountable for this type of horrible conduct.

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Can I Charge Tenants For Carpet Cleaning If I Put Down New Carpet?

By
Hank Rossi
-
What to do when tenants move out and leave a carpet cleaning problem in your rental property is the question this week

What to do when tenants move out and leave a carpet cleaning problem in your rental property is the question this week for Ask Landlord Hank. Remember Hank is not an attorney and he is not offering legal advice. If you have a landlord question for him please fill out the form below.

Dear Landlord Hank,

If the previous tenants left stains on the carpet, and haven’t removed the stains.

Can I charge them for cleaning, even if I put new carpet down?

-Faye

Dear Landlady Faye,

If the tenants stained your carpeting and then it should be cleaned and stains removed at their expense.

Carpeting in a rental may have a lifespan of only 5 years depending upon usage, initial quality, pad quality and installation so if this carpeting was at its end of life and you are going to replace it anyway I would not charge the tenants for staining a carpet that you are not going to keep.

Just be fair and treat your tenants like you’d want to be treated.

Sincerely,

Hank Rossi

What to do when tenants have too many vehicles on your rental property and what should the lease say is the question for Landlord Hank
Landlord Hank says, “Just be fair and treat your tenants like you would want to be treated.”

www.rentsrq.com

Ask Landlord Hank Your Question

Ask veteran landlord and property manager Hank Rossi your questions from tenant screening to leases to pets and more! He provides answers each week to landlords.

  • This field is for validation purposes and should be left unchanged.

Each week I answer questions from landlords and property managers across the country in my “Dear Landlord Hank” blog in the digital magazine Rental Housing Journal.   https://rentalhousingjournal.com/asklandlordhank/

Tenant Cut Off Electricity And Moved Early What Do We Do?

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A Tenant Poured Grease Down Drain Who Is Responsible?

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Ohio Would Make Tenants, Not Landlords, Pay Unpaid Utility Bills

By
John Triplett
-
Ohio legislators are considering a bill to make tenants responsible for unpaid utility bills and other municipal bills but cities oppose it

Ohio legislators are considering a bill to make tenants responsible for unpaid utility bills and other municipal bills, and to allow cities to collect unpaid bills directly from renters, according to reports.

Currently, Ohio law allows municipalities to collect overdue utility bills – such as water, sewer and trash – from “an owner, tenant, or other person who is liable to pay the rents or charges.”

One of the bill’s sponsors, Rep. Mark Johnson (R-Chillicothe) said unpaid bills often fall on landlords rather than renters.  “To me, it’s personal responsibility,” Johnson said. “You run up the bill, it’s your job to pay it.”

Johnson said he felt compelled to support the bill after talking with landlords who said they had been hit with utility fees exceeding $1,000 after a tenant had moved away without paying.

“A lot of them (renters) know the law and they do this repetitively and often run up huge water bills because the cities do not go out and valve the water off like your electric company takes your meter if you don’t pay the bill,” Johnson said.

Johnson said the current system does not only negatively affect landlords but can also result in higher costs for tenants.

“It increases rental costs,” Johnson said. “It’s a common business practice. If a landlord is hit with this, they’re going to recover it with [higher] rent for everybody.”

Cities may not be in favor of the bill

However, multiple Ohio municipalities and city water departments are not on board with the bill. Andrea Yang of Greater Cincinnati Water Works said in written testimony that landlords are better positioned than utility entities to manage nonpayment risks through security deposits and tenant screenings.

“[Municipal utilities] have no knowledge or control over the lease terms, including when the tenant has vacated the property, which makes it exceedingly difficult for the utility to pursue unpaid amounts from a tenant,” Yang said.

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