Posted by: Morgan Walsh
Multi-Family Specialist
775 336 4646
Morgan Walsh is a commercial broker with 20 years experience in investment sales, multifamily and specialty sales, representing buyers and sellers, institutional and private developers in market rate apartment sales, mixed-use residential development and the development of affordable housing projects.
Managers in every rental submarket are reporting a steady rise in notices to vacate from Hispanic families returning to Mexico. The Holidays have always been a time to return to family, with presents and some cash, especially for young men who had not established a household in America. Now, though, job loss has meant that young families are returning too, and they may not be back in February. After all, jobs brought them to the region and jobs alone will bring them back again. In past recessions, there were always particular regions said to be hiring and willing workers traveled to take new work. Now the perception is widespread that opportunities are few and unlikely to last. And the families are leaving.
For the apartment market as a whole, February and March will be a bellwether of overall vacancy throughout 2009. That will coincide with another wave of demand from tenants in single-family and condo rentals who lose possession in a foreclosure and show up at the rental office with a job, good credit and an eviction on their records. Will they be disqualified ? For the apartment complex whose tenant profile is Hispanic families, this may fill the gap. But a tenant who has been through an eviction is three times more likely to default than one who has not, simply because they have traded the temporary free rent of default before dispossession against the black mark that's already on their record. Often, they have left the house or condo in deplorable condition but the rental manager cannot confirm with a prior landlord who lost the property to the bank.
For owners, now is the time to reassess the rentability of your units and ask exactly who you want to attract as a tenant and how to reach them. Owners who wait and suffer double-digit vacancy risk de-stabilizing their asset, demoralizing the manager and jeopardize the tenant quality profile.
Do you own or manage units where this trend is a factor ? We welcome your thoughts, comments and predictions.
For the apartment market as a whole, February and March will be a bellwether of overall vacancy throughout 2009. That will coincide with another wave of demand from tenants in single-family and condo rentals who lose possession in a foreclosure and show up at the rental office with a job, good credit and an eviction on their records. Will they be disqualified ? For the apartment complex whose tenant profile is Hispanic families, this may fill the gap. But a tenant who has been through an eviction is three times more likely to default than one who has not, simply because they have traded the temporary free rent of default before dispossession against the black mark that's already on their record. Often, they have left the house or condo in deplorable condition but the rental manager cannot confirm with a prior landlord who lost the property to the bank.
For owners, now is the time to reassess the rentability of your units and ask exactly who you want to attract as a tenant and how to reach them. Owners who wait and suffer double-digit vacancy risk de-stabilizing their asset, demoralizing the manager and jeopardize the tenant quality profile.
Do you own or manage units where this trend is a factor ? We welcome your thoughts, comments and predictions.
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