The imbalance between supply and demand in the real estate sector has reached its peak – there is an influx of buyers vying for the same property that is priced astronomically high. While the coronavirus pandemic did exacerbate the tight housing supply, the current frenzied market has been long-brewing owing to several factors. One of the major causes is the fact that demand has increased substantially due to the growing millennial market. While there are several ways to predict real estate trends, there can be sudden shifts that can change its course for months or even years. Hence, reversing such gaps can take time, making it even more necessary to learn how to navigate the homebuyer or rental market.
The soaring costs, low inventory and high competition have left many homebuyers in the lurch. Thus, more and more people are seeking rental options instead – not realising they have high chances of being priced out in this market as well. Landlords have been raising rent prices as they are aware that the demand in the market will support the increases. This leaves many tenants in a conundrum: should they agree to renew their current lease at a higher rate, or move out in search of a cheaper option? Or should they take the financial plunge and buy a property (even though that market is experiencing similar price jumps)?
With bidding wars, quick sales, and too many people chasing too little inventory, navigating the rental market now involves more than just making an offer well above the asking price. Instead of simply agreeing to put down a larger deposit, you can boost your odds in this competitive market through several other ways. Graana.com, Pakistan’s smartest property portal, has outlined a few tips for you below.
Evaluate Your Financial Health
First and foremost, consider your financial situation. Do you have a stable job? Are you considering shifting to another workplace? If you are expecting such changes in the future, you need to set a budget accordingly. This will also put you in a position to make an offer right away and secure a property instead of wasting time by fumbling around with your finances first.
It is also important to keep in mind that, depending on the tenancy agreement, you may be required to pay for more than a single month’s rent upfront.
With your finances already lined up, you would also be able to prove to the landlord that you can close the deal soon. After all, the best offer is not always the highest offer – most landlords are just looking for reliable tenants who can make payments on time.
Another tip is to look for properties below your budget. Bidding wars are becoming more common in today’s rental market with many people putting in offers for the same house. Targeting properties that are below your budget leaves you some room to bid up, if needed. This is a more feasible option than increasing your budget or agreeing to rent out a place that will set you back financially in the long run.
Another common solution for financial concerns is to look for a roommate who can split the bills with you.
Research on the Local Rental Market
Spend your time looking around first. Scan rental websites for listings, and take note of how long certain properties have been on the market. This will give you an idea of the average rental prices of different types of properties. It will also help you decide on which neighbourhood, features and amenities you are looking for.
Also keep a lookout for buildings that have recently been built or still undergoing construction; newly built apartment complexes usually offer better deals as they have to quickly fill up units in a specific amount of time. In some cases, they may not be posting listings on the usual rental websites but on their own websites instead.
Make Room for Compromises
As properties on the rental market only last for a few weeks, you need to learn to be flexible. There most likely won’t be many places that fit your criteria completely, so expect to make compromises on certain aspects. It is advised to make a list of your priorities first and narrow down which features matter the most to you and which you can learn to let go of.
You can widen your horizon – literally – by looking for a place that is further away from prime destinations (which can considerably reduce costs as well). Plus, you can look for non-monetary incentives instead e.g. pet-friendly apartments, or rentals in a neighbourhood that is close to your kids’ school. In some cases, these may even be more valuable than an extra square footage.
If possible, try to be flexible with the move-in dates as well. Showing your ability to be flexible in front of the landlord is also another way to stand out among a pool of other potential tenants.
Come with copies of all the necessary documents, like proof of identity or bank statements (to prove that you can make rent payments on time). Also inform your references beforehand that they might be contacted soon so they should respond in a timely manner (this should ideally be your employer or previous landlord).
This would make the process easier for you and your potential landlord both, as it saves time instead of going back-and-forth about missing documents. It also shows transparency, and the landlord would get the impression that you are serious about the property.
Show Sincere Interest
A tenant interested in the property itself is an ideal candidate for any landlord. Little things go a long way — showing up to viewings on time and expressing your preferences would ensure them that you would treat the house as your own and take care of it.
If you are in the position to sign a long-term lease, make that clear as well; it shows serious commitment, and your landlord would be looking to avoid searching for tenants again so soon.
If you have any questions in mind after meeting with the owner, don’t hesitate to drop them a message. This encourages further dialogue and shows your interest. With a single listing bringing in a number of inquiries in the current rental market, any post-interview questions would also help in giving the landlord a reminder of your particular application.
Don’t Settle Too Soon
While it may be tempting to sign the dotted line immediately in this landlord-friendly market, don’t let a time crunch force you to make a hasty decision. It is better to stick to your budget instead of making a huge payment every month for a property that is not even worth it.
Since you can’t control the external forces of a rental market, focus on what you can control instead – waiting for the right property gives you more time to increase your savings and fine-tune the details.
Hire a Real Estate Agent
There is no margin for error in today’s rental market. Therefore, your best bet is to call in a professional to give you expert guidance and personalised recommendations. A real estate agent can walk you through the process, notify you of properties as soon as they hit the market, and also make your offer stand out amongst the rest. Most real estate agents even have access to properties that have not been listed yet, thus increasing the number of potential matches. When you are in a niche market especially, you would need the help of a realtor who is familiar with the area and would know how to use different market conditions to your advantage. They can also save you the hassle of searching for options, scheduling appointments, negotiating deals and avoiding rental scams.
For more information on how to navigate a market with sharp-elbowed tenants, follow Graana.com.