- AppFolio Property Management sees Baltimore as a hot rental market.
- Based on RealtyTrac numbers, the vacancy rate and the number of available units are both dropping.
- AppFolio exec Nat Kunes says that he sees Baltimore landlords offering shorter leases, which leads to multiple rent increases for a tenant each year.
AppFolio Property Management, one of a suite of companies under the AppFolio name, is the proud owner of a massive amount of information about rental markets across the country. With clients in all 50 states, their experts can share insights on the goings-on in specific local markets.
The company’s Vice President for Product Management, Nat Kunes, had quite a bit to say about Baltimore, a surprise entry into the list of markets where it’s good to own rental property now.
Kunes based his comment on the recent RealtyTrac report that discussed rental returns by market. It ranked Baltimore third for the highest potential rental returns.
According to RealtyTrac, Baltimore is second only to the Atlanta and Macon, Georgia, metros for this phenomenon.
Among other interesting tidbits about the Baltimore rental market, the RealtyTrac report found that the market is close to a three-year high in occupancy rates. Last June, the rate was 95.4 percent.
That came during a time that there had been an ongoing, precipitous slide in the available supply of rental units. Over the past several years, rental inventory has been trending downward:
- 2013: 3,450
- 2014: 2,607
- 2015: 2,500
The estimated for availability for this year is 1,708 rental units.
Kunes add that the Baltimore market has seen slow but steady job growth, with a total of 42,000 jobs created within the past two years.
Meeting rental market demand in Baltimore
“Baltimore is a market that’s growing,” said Kunes. “They’ve seen net population migration into the city, due to the job creation. We’re seeing rental price increasing as a result.”
He said that renters are snapping up units at a rapid pace and that all unit sizes go quickly. There is not a demographic differentiation in the rental market – all age groups seem to be continuing to seek available rentals.
Since multifamily building can’t be built as fast as demand needs them to be, Kunes said that is leading to shorter lease terms in hot cities, such as Baltimore.
“Landlords in those markets are turning to shorter lease terms,” he said. “That allows them to increase rents more than once a year, but not enough to make it worth a tenant’s while to move.”
He adds that after reading industry studies and reviewing AppFolio customer data, he is confident that Baltimore will continue with this trend.
To serve clients in these and other cities with tight rental markets, AppFolio moves in with products and services tailored to the property manager on the go. They host MeetUp groups to connect the web-savvy with the company. The next Baltimore MeetUp event will be May 18.
And, the speed and convenience of using the AppFolio tool helps property managers in the full lifecycle of the rental transaction.
Kunes said that, in markets that are highly competitive for rentals, a property manager can use an iPad to get a completed application, run a credit check and get a signed lease almost instantaneously. For renters who have looked at photos online, this saves them the effort of traveling from property to property to look at rental properties.
Owners get their own portal for accounting and reporting purposes, and a streamlined vacancy ad process. Mobile inspections are also offered, which helps cut down on the time that units are vacant.