The real estate business is cyclical just like any other business. Long time industry veterans talk about the 7 year cycle of the real estate market. Investment properties are highly affected by this cycle. As the market becomes a seller’s market, the prices of investment properties tend to be high as well. Typically this results in low rental inventory. Renters compete to find the right home to buy and often end up in bidding wars which in turn drives the prices higher. In a buyer’s market, the price of real estate is lower making homes more affordable. As the homes become affordable, the rental prices plummet. Qualified individuals leave the rental market and look to purchase their own homes, leaving behind a large inventory of vacant units. However there is another cycle within the rental market that affects the availability of rentals. In October, during an Open House in Turlock prospective tenants unanimously complained about the lack of inventory in the market. One person said that she had been looking for a home for more than six months and was still unable to secure a home for her family. Astute property managers and investors know these cycles and use this knowledge to maximize returns and take advantage of time to make capital improvements.
The rental market begins to see movement during the month of February. By the time February or March roll around, people know whether they will receive a refund from the IRS. Tax refunds are used to put down a security deposit and to pay for the first month’s rent. During these months, many inquiries regarding properties begin. April thru July are prime months to find a larger inventory of available properties for rent. As individuals buy homes during the spring and summer months, more properties become available for rent. Also during this time homes occupied by college students also become vacant. San Joaquin, Stanislaus and Merced Counties have the good fortune of being home a large number of higher learning institutions. This also means that summer months are wrought with vacancies generally occupied by college students. The months of August and September are the last months in the rental market. Families prefer to be moved in ad settled near their children’s’ school. The rental market really begins to slow down during the month of October. One last push is often made to get units occupied before the holidays begin. Once November starts, many get into the holiday spirit and don’t want to move during Thanksgiving, Christmas, New Year, etc. January is a month to recuperate from the costs of the holidays and begin to look ahead. Intimate knowledge of the rental market is what sets New Bridge Management apart. Contact us at 209-668-6700 or visit our website to learn how we may maximize the return on your investment.