Which Way are Rents Going?

Which Way Are Rents Going?

Down, according to a story written in the Arizona Business Gazette by J. Craig Anderson on September 17, 2009.  Average rental rates have decreased by 15% this past year, and according to an anonymous source, they could come down another 15%.

A quick check of my old stopping grounds, Ahwatukee - 85048, single family dwellings shows only a $0.01 per square foot drop, hardly 15%.  I checked the Ocotillo section of Chandler, 85248 where we are located and do much business stayed the same over that two year period.

Where are these 15% average price are drops?  When I run larger multifamily housing, i.e.: apartment buildings over the same two periods and the same two zip codes, I do find rental price drops of 7-9%.  A far cry from 15%!  Even though I am using only two zip codes and realizing that is probably not statistically significant for the entire valley, it is confirms what I preach to my investors.

1) Purchase single family homes, or duplexes up to fourplexes.    Single family homes in down markets don’t drop as much as large commercial complexes.

2)  During the upswing, and we WILL have an upswing, single family homes will recover faster.

3)  Obviously, there is less variation in rental income in single family units.

4)  Stay in better areas of town, or areas you know will be developed in the near future.

5)  Never buy with the thought of selling in less than 3-5 years right now (with a few exceptions).

ValleyWide Property Services, specializes in finding properties for families and investors in addition to performing Property Management, Sales and Leasing.