5 Reasons Why & 8 Ways to Win Out.

I remember going white water rafting a decade ago in Aspen in summertime. Prices there had really moved up and I asked our guide where everyone lived. The answer was not in Aspen anymore. Most people who worked in Aspen worked 30 – 45 minutes out in Basalt or Glenwood Springs. Other wealthy areas like San Francisco have gone through similar things. Now it’s the Palm Beaches turn.

This week, our rental specialist, Will Dean was interviewed by WPTV on the state of the rental market. The Palm Beaches has the 3^rd fastest growing rental market in the United States. Read and Watch the Story. Rentals have followed home sale appreciation and are up 27% from a year ago. And it might get much worse.

Here are a few reasons why

Existing rentals are being sold off by investors ready to cash in. Will has had several sales from longtime landlords capitalizing on the 30% + appreciation. The Buyers tend to be end users reducing the supply.

2. The supply of homes being built cannot keep up with demand.

3. There isn’t available land to build on going forward.

4. Single family home REITS are now looking to purchase more homes including new construction communities.

5. AirBnB are taking up some of the supply.

Search the Rental MLS

Many renters are now scattering. Some are becoming purchasers and lots are going up to Martin County or western Palm Beach County to save money. The jobs are in Palm Beach County but longer commutes just like the Aspen example are becoming the norm if someone wants more house for the money.

I asked Will for a few tips for folks trying to rent on winning out.

Think of it as applying for a job as an applicant. You need to stand out.
Stick with one Realtor and consider signing an exclusive agreement. Realtors HATE representing people getting a rental and most don’t want them. One reason why is it doesn’t pay much. Maybe a decent lunch at the Olive Garden (not including the $9 glass of wine). The amount of work is a ton. People looking for rentals are also notoriously un-loyal. Realtors do it as a favor to take care of a client. Pick a Realtor who has experience with rentals and will work hard for you. Offer to work on an exclusive and you’ll be surprised at how much more effort you’ll get.

3. Clean up your social media. Landlords are going to check you out. If you have all night poker games or get in heated arguments in social media that can work against you. The landlord wants civility in their tenants.

4. Verifiable credit income. Landlords look for roughly 3x rent vs income. As an example, $4k monthly rent is $12,000 monthly gross income. Think of this as a lender underwriting a loan ability to pay. If W2, last 2 paystubs. If self-employed, last 6 or more “personal” bank statements showing deposits.

5. Move fast. The leverage is with the landlord. You don’t have time to mess around.

6. Prices are going up and with season coming and not enough units, this should continue.

7. Get an option on year 2.

8. Consider Buying a small place instead of renting. Lots test out an area by renting. Instead of renting, one can also buy a small villa or condo. Keep it a few years and then buy your true home. A more inexpensive purchase lets you test the area out without the worry of renewal of the lease on year 2 or 3. We are seeing much more of this.

Jeff Lichtenstein is owner and broker of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over a 1,000 transactions, and manages over 50 agents in a non-traditional model of real estate that mimics a traditional business model. Some publications he has been quoted in.

Feel free to ask him a question directly at [email protected].

Posted in Jeff's Journal, Rentals on September 18, 2021 at 7:08 am.

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The Rental Gentrification of the Palm Beaches.

5 Reasons Why & 8 Ways to Win Out.