Imagining what your future apartment will look like? Go ahead and dream a little (or big) dream. But when you’re finished fantasizing about your full-service four-bedroom apartment with floor-to-ceiling windows and a balcony within walking distance of the hippest part of town, join us back here for a reality check.
Trust us, we’re not trying to burst your real estate bubble. But the market has changed dramatically since the early days of the COVID-19 pandemic. So rental goals that might once have been plausible—or at least possible, if you got really lucky—might no longer even be imaginable.
With that in mind, here are some desires that today’s renters may have that just aren’t going to fly right now. Read on so you can adjust your expectations accordingly as you try to negotiate this crazy rental market.
1. Anticipating lease incentives
OK, nope. It’s not going to happen in today’s market. It’s more likely that renters are going to have to try to make themselves seem more attractive as tenants, as opposed to landlords trying to attract renters with incentives.
“In cold rental markets, landlords and property managers have to bend over backward to attract tenants and fill vacant units—sometimes offering a free month’s rent, vouchers to local gyms, even free TVs,” says real estate investor Brian Sparks, co-founder of Spark Rental. “Right now, however, we’re in a hot rental market, with demand outstripping supply in most markets, so landlords don’t have to offer any incentives to sign on new renters.”
In other words, you shouldn’t anticipate any stellar offers right now beyond just getting the unit (which is actually a reason to celebrate in this climate).
2. Setting unrealistic rent expectations
We’re currently in a “low inventory” market. In other words, there are just not enough rentals to keep up with the number of renters seeking units.
“Everything related to economics comes down to supply and demand,” says Michael Cannivet, president and chief investment officer of Silverlight Asset Management. “Quite simply, we are not producing enough housing supply, and vacancy rates are also extremely low, so setting your expectations for rent costs too low could mean that you end up wasting valuable time in hunting for a rental apartment.”
Translation: If you have a number in mind that’s wildly out of sync with the current rental market, you might find yourself endlessly looking for a unicorn that doesn’t exist.
3. Assuming an apartment will look just like the photos
So many apartments are now doing virtual staging, but that can often lead potential tenants to feel like they were victims of a bait and switch.
“Often, after a prospective tenant sees online photos of a rental with virtual staging, they feel disappointed when they visit the space in person,” says Valerie Fitzgerald, author of “Heart and Sold: How to Survive and Thrive in Real Estate” and a top real estate agent with Coldwell Banker in Los Angeles. “Think of how this happens in online dating when profile photos are sometimes thought to be misleading.”
It’s called marketing, people!
Fitzgerald suggests that virtual staging of an apartment, condo, or house shows prospective tenants how the space could be furnished, and it can actually help them see themselves living in the space.
Instead of feeling like you were conned, try using the virtual staging photos as free interior decorating suggestions and a way to see how you might make your new apartment look great.
4. Expecting you can see the apartment in person
An extension of the “virtual” point above—the market is hot and COVID-19 has made things weird. As such, many people are putting in applications without first viewing an apartment in person.
“Since the pandemic began, the virtual showing environment has changed how landlords showcase their rental properties to potential tenants by increasing the speed and process of how some tenants are obtaining their next rental,” says Jason Gelios, author of “Think Like a Realtor” and a top real estate agent with Community Choice Realty in South East Michigan. “Because the current rental market is so volatile, many potential tenants are choosing to virtually see a property and applying for the lease online—without physically seeing the property first.”
Renters who assume they can schedule an in-person appointment with the landlord might lose out on the place altogether.
5. Thinking you have time to make a decision
Don’t get lulled into thinking you have time to mull decisions over. You don’t.
“Given that the inventory of available leases is very low in most cities and towns, when a tenant starts the process of looking for a lease, once they find the one that fits their budget and needs, they need to be ready to lease it immediately,” says Fitzgerald. “Most often, there will not be enough time to think it over or ask for a second showing. [You need to] decide quickly.”
With that in mind, Fitzgerald suggests that if you’re viewing a rental in person, it’s a good idea to be prepared—at a minimum—with a copy of your credit score, your recent bank statement, several recent tax returns, and, if possible, a completed lease application (which you can frequently find online). Don’t blink, or it may be gone!
6. Holding out for a no-fee apartment
Landlords formerly used to pay broker fees so they could advertise they had “no fee” apartments available. But that’s not happening right now. Anyone hanging on to the idea that they’re going to find a no-fee apartment without a broker is going to be “hanging out” for a long time.
“COVID discounts are over. Due to the surge in rental prices and lack of inventory, landlords are no longer offering to pay brokerage commissions,” says Nile Lundgren, a licensed associate real estate broker at Serhant. “This has turned buildings that were once no-fee into fee apartments even if you come without a broker.”
Therefore, with such limited inventory, Lundgren suggests it’s wise to hire an agent since it’s likely that you will be paying a commission anyway.
“In addition, working with an agent reduces stress by helping to organize and navigate the complexities of the market with ease,” says Lundgren. “They can also help source off-market or coming-soon opportunities and be an advocate for you in a competitive market.”
7. Hiding information from your potential landlord
Background checks are too easy to do today. So thinking you can hide your records (financial and otherwise) from a potential landlord is definitely wishful thinking. It’s better to be honest.
“If your application isn’t perfect, don’t hide that information,” says Jameson T. Drew, president of Anubis Properties. “You might get away with it with some smaller landlord, but thorough background checks are cheap and easy to come by and you don’t want to be evicted later for lying if you’re found out.”
On that note, fret not if you keep losing apartment after apartment because of less than stellar financials. There is a unit out there for you somewhere.
“If you’ve been pounding away at a certain area for months with no luck, it might be time to move onto nearby communities,” suggests Drew.
8. Believing that your rent is all you’ll have to pay
Once upon a time, the quote that tenants were given for their monthly rent was what they would be expected to pay. Now, in 2022, things are a little more like an à la carte menu.
“In the past, water, sewer, and trash pickup may have been included, but today many owners bill this with rent,” says Bruce Ailion, a real estate agent with Re/Max Town & Country in Atlanta. “You may also be required to pay for routine inspections of the property and maintenance items like filter changes or unblocking a toilet.”
Additionally, Ailion says to keep in mind that requesting after-hours or weekend repairs might result in the premium price for after-hours service being passed on to you, the renter. Many owners also now charge additional rent and management fees for having a pet. Late fees and returned check fees are higher than ever. You might even face fees for writing a paper check rather than setting up a direct deposit for your rent.
“Understanding what the tenant is responsible for is essential in budgeting your monthly payment,” says Ailion.
That being said, while it’s pragmatic to have a down-to-earth mindset, don’t be afraid to also hold on to a modicum of hope.
“When the market softens, then renters can once again expect more perks on their lease agreement,” says Cannivet. Until then, dream on within reason.
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