Quick Update on The CDC’s Eviction Moratorium
At the beginning of May, a federal judge vacated the CDC’s eviction moratorium. In the 20 page ruling, the judge ruled the agency has exceeded its authority with the ban on evictions citing that the Public Health Service Act does not give the agency the authority to place such a ban. An appeal was filed alongside the ruling and the moratorium will remain in place until the appeal can be heard.
Keep in mind that Austin & Travis County have their own policies set in place. Mayor Steve Adler and Travis County Judge Andy Brown recently filed and signed an extension of the local eviction ban until August 1. Landlords with properties in Travis county need to be aware that even though the federal order may be set to expire soon, no evictions will be taking place in the Travis County JP Court system until at least August 1.
This is why we are diligent in our efforts to lease your rental home. Great tenant screening and making sure all potential applicants meet our required criteria has really helped Stone Oak and our clients get through this unprecedented time in real estate with little-to-no difficulties.
Trust the process.
With that being said about evictions, recently the Biden Administration allocated $21.6B in rental assistance to help those who have lost their jobs or experienced hard times due to the pandemic. We’ve seen programs like this work having heard prior success stories from our tenants receiving rental assistance from similar programs run by Travis County, the City of Austin & the Texas Rent Relief Program. We hope that these funds that have been earmarked for rent, end up flowing to landlords who have been affected greatly by this entire situation.
Maximizing Your Property's Rental Price
Our team is trained to maximize your rental price while leasing your property as quickly as possible. You may think that our price is too low or sometimes too high, but I wanted to make sure you know that we have a specialized leasing department with access to real-time data feeds from our local market.
Let’s talk about incentives. Certain homes or areas of town can be more challenging than others to attract good tenants. This means that we may suggest offering incentives from time to time. These would be things like half-off your first month’s rent or even the first month rent-free.
We don’t usually suggest these when we first place the listing. These are usually offered on stale listings that may have started too high and have been lowered to a more reasonable price level.
In some cases, such as an inventory surplus, some higher-end listings, or even rural listings we may get much more exposure with an incentive from the start and help to avoid a listing staying on the market too long - costing you money over the term of your next lease.
We have spoken to many owners over the years that believe their home will fetch a higher rent because of some feature in their home that’s custom. Let’s note that most people will choose their home based on price first, then location, then features of a home will be considered. If your home has a completely remodeled kitchen in a 1980’s neighborhood, it should get a higher price than the competition with older kitchens. However, if you are in a newer home with a nice back patio, or built-in surround sound, or even beautifully redone flooring (not builder grade), you most likely will not get a premium. However, it may help to lease your home faster than the competing homes.
All of this depends on your rental property's competition. If you are the only home in the neighborhood available for lease, you will have more freedom in asking for a premium for your rental home. Conversely, if there are a few other homes on the market and you are the highest price with the nicest features, you will be the last to lease and may have to lower your price to get more traffic. These are basic supply and demand principles that are very accurate in the market.
This is all to say that what we try to consider is time on the market. Let’s say you want to try and get a $100 premium for your Austin rental home, because it is, of course, the nicest home in the neighborhood. If it takes an extra few weeks to find the tenant because we didn’t price at the market, you lose the premium and have the holding costs for the extra time. Put simply, in that month it took to lease the home, you could have had someone in there at a better price, so the cost was not necessarily worth the benefit.
On average, our homes stay occupied for just close to 3 years. In most cases, we raise the rent each year. So, you are better served slowly raising the rents on renewals without losing time on the market and you will have your tenant stay longer to avoid turnover costs and avoid time spent on the market in the future. Keep in mind, this example was to give some perspective of when we price too high with the competition. Some markets are allowing us to fetch a premium because of a shortage in inventory, but I wanted to help explain our strategy.
We are seeing a shortage in leasing inventory. This will likely begin increasing lease prices. Greater Central Texas is still experiencing a major housing shortage in homes for sale, which is now causing a shortage of homes to rent. We will be adjusting some of our policies to accommodate the high-demand areas of town. In some of these areas that are most affected by the shortage, we are starting to see multiple offers on our lease listings. This is not common in all areas of town as of yet, but I wanted to make you aware that we are acclimating to this bizarre, but exciting time in real estate.
Pre-Leasing Your Rental Property
When COVID-19 initially took over the world, we started to receive a ton of push back from our residents regarding our practices for pre-leasing our properties. Our residents weren’t comfortable letting strangers in their home in the middle of a pandemic for showings...
As things are progressing and the vaccinations are more readily available, we are looking to instill the practice of pre-leasing our rental properties once again. With the current market situations we feel this is a big win for our owners and hopefully can result in properties spending virtually zero days on the open market given the current shortage of inventory.
As always, we appreciate your time and the trust you have placed in us to handle your real estate investments. Please never hesitate to contact a member of our team if you need anything.
Own a rental property in the Greater Austin area and not already a client of Stone Oak? Learn more about our Austin property management services.