LYN AYERS, CCRA President
from the May, 2017 CCRA news
Summer is here! Well, today was surely nice and tomorrow is forecasted to be even nicer. Sometime in the next few months it will warm into at least the lower 70s—that’s what the weather folks say. Maybe it will even rain less often than every other day.
This weather reminds me of our rental industry. In the mid-2000s, home values were skyrocketing while rents stagnated. During the Great Recession, values dived and rents held pretty well. However our costs of operation (taxes, insurance, utilities, repairs and replacement costs) continued to increase. We had difficulty finding qualified renters which resulted in significant numbers of vacancies.
For nearly a decade many of us wondered when (if) these doldrums would end.
As you know, those days are long past Home prices again are moving up but what is different is there is a shortage of housing. This naturally causes a supply/demand mismatch causing rents to increase. Unfortunately, incomes have not increased to match the increasing costs of housing.
My point is that the housing industry is basically cyclical as is the weather. There is good weather and bad weather; there are good times being a landlord and there are bad times. Now is a good time to be a landlord. Realize this is transitory. At some time in the future, growth in the county will slow down or reverse to the point that builders in Clark County will have overbuilt what we need, vacancies will start to become common, renters will be hard to find to fill our units and concessions and rent reductions will be the name of the game.
You might be wondering why I am devoting so much text to this. Now that rents are recovering, this is the time to conduct your repairs while you have the cash flow. Need to upgrade a kitchen? How old is that roof or the carpet or the vinyl? Do those repairs now while the market is good. Don’t wait until concessions become the name of the game or vacancies occur and rents drop.
Hopefully by the time you receive this edition of the newsletter, this year’s legislative session will have ended. That means that it did not go into extended session. As for taxes there are two likely outcomes: either taxes will go up some or they will go up a lot. Whatever the results, plan to talk to your legislators or call them or even write a note.
Let them know that you are proud to be a landlord providing housing for folks who cannot afford to purchase. Remind them that most of us bend over backwards to give every benefit possible to our tenants. In other words, let them see for themselves that we care. That many of these changes in support of low cost housing actually result in higher deposits and rents plus tighter criteria.
Finally, our speaker for May will be discussing insurance considerations for our rentals. How much insurance should we have? Should we require renters insurance? Do umbrella policies have a place? These topics and more will be discussed at the May 30th dinner meeting.
So enjoy the nice weather whenever we get it. The same goes for good rental conditions because the market will change just like the weather.