Inflation is having an impact on every industry, including the real estate market and the work we do as Alhambra property managers. Prices are higher for almost all goods and services, and that’s having an impact on what tenants are paying in rent and what you’re paying as an owner for everything from maintenance to insurance policies and professional partnerships.
We’re taking a look at what the current economic situation means for landlords, tenants, and anyone involved with the leasing, management, and maintenance of rental homes.
Alhambra Rental Values are Rising
Rents are high, even in California where rents have always been comparatively high.
There are several reasons that tenants are paying more to rent your property. First, there’s the demand. With housing prices higher and interest rates for mortgages rising, more people are renting instead of buying. That means there’s a high demand for well-maintained rental properties in desirable locations. The increasing demand and the low inventory drives prices higher.
This is largely due to inflation. Tenants have no choice but to adjust to climbing rental prices. This will be true whether we’re looking at a home that you’ve just listed for the first time or a lease renewal that you’re negotiating with an existing tenant.
Costs of Doing Business as a Property Owner
Earning more in rent is fantastic; your goal as a real estate investor is to build equity and increase what you earn on your rental property. Those earnings are likely to be diminished when you need maintenance or repair work. You might find you’re paying more for your accounting services, legal advice, insurance policies, and property management in Alhambra.
Property taxes could be higher, too. Your property has likely increased in value over the last couple of years. That means you will owe more.
How to Navigate the New Market Factors
Your income may be higher, but so are your expenses. How do you work around inflation when you’re renting out a property? Here are a few important suggestions:
- Get an accurate rental value for your property. When your property is subjected to rent control, you can only increase your rent so much every year that you renew a lease agreement. Even if your property is exempt from the statewide rent control laws, you still need to remain competitive in the market. Access good data and conduct a comparative rental analysis so you know what your competition is asking and what you should be earning.
- Pay attention to preventative maintenance. When you respond to needed repairs immediately and you stay one step ahead of the work that keeps your property safe, functional, and attractive, you’ll find there are fewer emergency repairs that need your attention and your money.
- Create a list of preferred vendors and contractors. Not only is inflation driving up the price of maintenance and supplies, but it’s also creating a bit of a labor shortage in some sectors. Establish relationships early with professionals you may need in the future.
Invest in Alhambra property management. With inflation driving up prices, this is a terrible time to be managing your own rental property. Partner with professionals so you can be sure you’re not wasting money or time.
Contact us at ZenPro Property Management for more information on how to leverage our experience and move through the current inflationary cycle.