Unfortunately, I don’t foresee rent falling here in SD anytime soon. I oversee a portfolio of over 2,000 units throughout SD in large (100+) apartment communities. This time of year is typically slow for us, but not this year. All our communities are experiencing occupancy levels over 95%, many over 97%. An interesting thing we did change in our rental criteria last year is the acceptance of foreclosure applicants (they were too numerous to ignore), provided they have a cosigner or other acceptable proof of payment ability. So far as we have tracked, none of these renters have defaulted on their rental payments. It seems going from a $4,000 a month mortgage to $1,600 or so montly rent is allowing them to keep up timely payments. Interesting how when you stay within your income levels how easy it is to pay your bills on time. Perhaps this has helped our occupancy levels or something else is transpiring, but I’ve found it an interesting thing for us to track. We were all expecting the failed condo conversions to take a bite out of our numbers, but we are finding that renters do not want to live in a ghost of a community where the $$$ does not exist to pay for the services and amenities they were expecting. Since there are so many defaults, HOA fees are not being paid and the associations cannot pay the bills to keep up with security, heated pools, landscape, etc… Your typical class A rental properties can still offer those benefits.
