Rents Firm, Vacancy Falls in Small Apt. Market

CHICAGO-With the apartment market being the one skyrocketing success story in commercial real estate right now, even the 50-unit or less property owners and managers are reporting gains. Compared to last year, a survey by the locally-based credit company TransUnion showed that these properties have had steady resident interest and stable or increased rents.

TransUnion finished its survey with thousands of users of its SmartMove rental screening service in Q3 2010, with a focus on those who run rental properties of 50 units or less. The 476 responders said this year is better than 2009, both in terms of occupancy and rents.

According to the survey, 70% of property managers said they are completely occupied, compared to last year’s survey showing 60% reporting full occupancy. Also, this year more than 76% of the responders said their rents have either held steady with last year or increased.

“There has been a positive change in the rental market in the past year as rental prices appear to have stabilized and property managers are locating more reliable tenants,” says Mike Mauseth, VP of the company’s rental screening unit. However, he said survey responders still feel the job market needs to improve to help boost the economy, and ease potential tenant risks.

He says that with the continued elevated credit risk for American consumers, it’s not surprising that 67% of the survey responders said they are concerned about attracting profitable and reliable tenants. Finding strong tenants has been an increasingly important factor to owners and managers since the recession, as many homeowners reeling from foreclosure jump into renting, pushing more of a look-away attitude on credit issues. “I think owners are still weeding out the real credit risks, but those with foreclosures may be getting a pass. In these unique economic times, some owners feel it’s unfair to ding a tenant for a recent foreclosure,” Mauseth tells GlobeSt.com.