Growth in rents by type of property
When it comes to property types, higher priced single-family units – or properties with rents at least 125% of the local median – are seeing the biggest rebound. Top tier properties saw rents rise 5% in March, up from 2.8% a year earlier, according to CoreLogic. This is the fastest rent increase for these dwellings in about 15 years.
Detached single family units are also doing very well, as are larger properties. Single-family units saw a record 6.9% increase in rents between March 2020 and March 2021, while two-bedroom units have now exceeded their pre-pandemic growth rates, with rents up 5, 2% over the year in April.
Units in the lower price bracket (75% or less than the region’s median rent) do the worst in terms of rental growth. Prices only increased by 3.2%.
Tech cities are slowly recovering
If you’re investing in tech hubs – or considering doing so – that’s also worth noting. According to data from Realtor.com, these cities are finally (albeit slowly) recovering.
When working from home became the norm early last year, rents in these areas plummeted. Today, the average rent in tech centers is $ 2,086, its highest level in months. Semi-tech cities like Denver and Austin appear to be recovering the most, while larger, more traditional tech cities (San Francisco and Seattle, for example) are recovering more slowly.
âThese hybrid tech markets, which have more diverse economies that don’t rely as much on the tech space as, say, San Francisco, have been able to avoid a sharp drop in rents and have therefore recovered quickly,â reports Realtor.com. bed. “Rental markets such as San Francisco and San Jose, which have seen rents drop to double digits, are indeed seeing signs of recovery, but it will take a little longer to fully return to pre-COVID levels.”
The bottom line
Median rents are finally bouncing back, so if you have any vacancies coming up, it might be time to think about raising your rents, especially if it’s a large unit or a detached unit. You could also consider a rent increase on existing tenants. Just make sure you give them plenty of information and be prepared to resell the property if they can’t afford the hike.