Got an email from my PM in Santa Rosa:
We have been experiencing the rental market slowing during the 2nd half of 2018 and certainly during the Holiday season. The units which would have rented quickly in the 1st Quarter of 2018 are now taking longer to rent. Some properties are also renting for a lower amount compared to a year go.
In the past few weeks, I (Chris) had 2 different leases typed and ready for the tenants to sign and move in. On two separate occasions, the applicants backed out and cancelled last minute before signing a lease and rendering the security deposit.
It has been well over year since the Santa Rosa fires devastated our county, and we have now settled into a new normal. Rents are still relatively high, but they are not like the extreme cases we experienced from October 2017 through February 2018.
BTW they are solid guys, the best among my pool of PM’s. Anyone wants a referral just shoot me a message.
How and how much do they charge?
I am grandfathered into my old, low rate. I used to be in their predecessor and then one guy left to start his own PM firm. I like the guy so much I left with him. So I am literally his first customer.
So you don’t know their current rate?
Nope, I don’t. But PM rates vary in a narrow band anyway. I’d happily pay a little more for good service.
Hard to find these type of quotes for PMs. Thanks for sharing. What’s the cap rate people see in that area these days?
Around 2k rent for a $400K property.
South Bay even in Silicon Valley is not doing much better. Since 2017 it has been normal. 100% tenants want to haggle for discount. Unless the housing is all new inside or below market rent people look at it and walk away. Reason is there has not many coming for jobs. This is reinforced by Apple with hiring freeze formalized. Fremont had those Tesla new employees looking for affordable housings. With the layoff I imagine there will be less strain on housing. Near north SJ, high rise here and there. Flea Market area had 1000s of new pigeon homes many are 1M and above… Some apartments have been offering 1 month for free to attract renters. Here any landlord asked more than 4-5K is there for a surprise. Expect longer vacancy and more flexible on price is the norm.
Rent softening a bit is actually good for everybody long term. There will be less demand for rent control, and tenants get some break in rent.
Rents still going up in Tahoe and Reno. Still dirt cheap compared to BA. Minimum wage going up a dollar every year.