In the wake of a particularly rough recession, families in Michigan and across the United States have seen everything from lost jobs to lost homes. When the housing market dipped to its all time low recently, home foreclosures forced many families to choose renting over ownership.
For the past two years apartment landlords have been able to raise rent and fill their properties, but some experts are now saying that this might not be the case for long.
Like a phoenix from the ashes, the housing market has slowly begun to rise. With banks offering loans at lower and lower APRs, families that once owned and are now renting are slowly being enticed back into owning again. And with further decline in apartment vacancies, many families see no other choice than to go back to buying a home.
In past years, with the demand for rental properties at an all time high, landlords placed less emphasis on perks in order to lure tenants into their buildings. Landlords were also able to raise rent because of the demand, many states across the nation averaging about a 1.7 percent increase from past years. But the threat of single-family home buying may force landlords to return to tenant perks such as money off rent if they want to keep their occupancy rate relatively high.
Some larger apartment companies have already shown a willingness to sacrifice a little occupancy for higher rents. But some experts say this may not work forever pointing out that rent growth depends on significant job growth and rising incomes, neither of which the market has seen grow exceptionally well in the past few years.
Finding the balance between tenant satisfaction and maintaining profitability is definitely something experts suggest landlords think about in the years to come.
Source: Reuters News, "U.S. economy may be nipping at apartment sector," Ilaina Jonas, Oct. 3, 2012