Move quickly if you need (and find) the perfect place to rent
Rentals in demand
Many property managers across town confirm what those who are trying to rent residential property already know — there’s a shortage of rental units in town. Across the board, from apartments to duplexes, town homes, condos and single family homes, rental properties in good condition get rented quickly in the Grand Valley.
“I got two houses at the end of February and I had them rented by March 1,” said Sheri Heath, property manager with Coldwell Prime Properties.
There aren’t many newer apartment buildings in the Grand Junction area. One of the most recently constructed market rent apartment complex was Peppermill Lofts on North Avenue. There are 48 units total in that complex, and just a single one-bedroom unit is currently available. A two-bedroom unit will be available the first week of April, but Maxim 4000, the property management company for the apartments, already has a strong applicant waiting for it.
Other companies see the same trend.
“We have 12 vacant properties in the entire office,” said Kathy Shipley with Bray Property Management, which has six agents who each manage more than 100 properties. “I only have three move-outs for the end of the month, which is unusual.”
Shipley said she’s also had a lot of renters looking for wheel-chair accessible units, which is difficult to find. Likewise, it’s difficult to find rental properties that will allow tenants to have dogs, especially larger dogs.
Dan Slover with Cedar Creek Property Management estimates that the properties managed by his company have a one percent vacancy rate.
“We have recently increased some rents,” Slover said. “With a one percent vacancy rate, it makes sense to bump things a bit for my clients.”
Cedar Creek recently moved its offices and now occupies a larger space near 28 Road and North Avenue. When it moved a month ago, it had more than 20 vacancies in various properties, but now that has dropped to two.
While this time of year is a typically busy season for rental properties, what’s happening right now does create a tight rental market. Homeowners who have not been successful in selling a property may want to consider renting the property until market conditions improve for selling.
“In most cases, we can cover their mortgage,” Slover said.
Property owners rely on a variety of methods to advertise vacancies. Some advertise in the newspaper, some on Craig’s List and some post a sign. Almost all local rental property owners also use Almost Home, a rental listing service offered by Catholic Outreach of the Grand Valley. Almost Home is updated every Wednesday and is a free service for property owners and renters.
“The listing is running 21 pages,” said Beverly Lampley with Catholic Outreach, which tries to encourage property owners to manage their own listings online.
Almost Home is strictly a listing service; prospective tenants must call property owners or managers directly and landlords must use their own application process. The last two pages of the listing are a roommate exchange listing.
With low interest rates and low prices, this is a good time to invest in rental properties. Typically, investment buyers need to have 20 percent of the purchase price for a down payment, but not always.
Dan Sites with Cornerstone Mortgage has a few mortgage investors who are willing to work with investment buyers who have a 15 percent down payment. As is the case with all mortgages, the interest rates, the loan-to-value and the terms of the loan all vary, depending on the buyer’s credit score and the market on the particular day the buyer is ready to sign. Interest rates change daily.
Lenders also want to see cash reserves for investment buyers.
It doesn’t always make sense to put more than 20 percent as a down payment.
“In some cases, the interest rate that they’d receive is better for a larger amount,” Sites said. There are also fixed costs in obtaining a mortgage that don’t vary according to the loan amount.
“Credit scores always matter,” Sites said. “If your credit score is above 680, you have everything available to you.”
When evaluating investment property, buyers should keep their potential pool of renters in mind. The type of single-family homes most often in demand are three-bedroom, two-bath homes with a garage. Of course, there are always exceptions, and a good two- or four-bedroom home could get rented just as quickly as a three-bedroom home, since there are fewer available homes with less than or more than three bedrooms.