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+--- Thread: Are rent prices going up or down? (/showthread.php?tid=6134)
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Are rent prices going up or down? - sistersue - 09-12-2009
Hi - I have a small rental house that will be vacated in a month or two. I'm thinking maybe this board could help me figure out approximately how much rent I should charge for the next tenant. This tenant has lived there for 5 years and I'm not sure how much the rent should be now. The small 1-bedroom house in on a paved HPP road, has a full kitchen and bathroom. The living area is 580sq. ft. It has a big roofed carport and has all electric for power. I include the electric and cable in with the rent price. There is no washer & dryer at this time. It has no lana'i. It's set back from the road and is pretty peaceful and quiet. The water tank is 9,000 gallons. How much would you charge? Thanks!
RE: Are rent prices going up or down? - mdd7000 - 09-13-2009
First question to ask is why did the renter leave after 5 years? That answer may be important to your question.
Beyond that, what could you do as a landlord to improve the place to achieve a higher rent? If you added a washer and dryer, the electric would go up, but would the added convenience for a prospective renter add enough for a decent payback time on your additional investment?
RE: Are rent prices going up or down? - Bullwinkle - 09-13-2009
In school years ago --- take it with a pound of salt. I remember the 1% rule of thumb. Rental rates should reflect 1% of the value of the property (structure as the land wont depreciate or wear out) per month to "pencil" out.... Any real estate pro's about?
RE: Are rent prices going up or down? - ric - 09-13-2009
I would just look around on craigslist for something else in the area, use your judgement to adjust for what you have in comparison. Then run an ad and see if you get response. You can always lower it. In the current market, I would think erring a little on the low side to ensure that you can find a tenant, and perhaps have the choice of a few good prospects, you will come out better in the long run. Every month that you sit vacant looking for an extra $25 or so, could take 2 years to recover at the higher rate ...
As far as the 1% rule of thumb, I think it has some truth to it, but who even knows what their current value is on anything? It may be more accurate that something would sell at 100 times what it would rent for, rather than the other way around.
RE: Are rent prices going up or down? - PaulW - 09-13-2009
I'd check with the ads in the Hawaii Tribune Herald, but you've probably thought of that. There are usually quite a few so it should make for a good comparison.
RE: Are rent prices going up or down? - missydog1 - 09-13-2009
This is all very good advice. Definitely go through the class ads in paper and craigslist. Because craigslist allows photos and the ads are far more desctiptive than ads where landlords pay by the word, it's a very useful tool. Use the search feature to make similar parameters and return all ads rather than just looking at the new stuff.
The lack of laundry facilities would mean that if I were looking for a rental I would not look at it. About 15 years ago I vowed I was done with doing wash at public laundromats. Many rentals have washer and dryer or at least a washer. Of course if your rental doesn't have the plumbing hook-up, that would up the cost of adding a laundry. And there may not be the space to do it.
From the size it seems your target tenants aren't families, and may even be singles. I know more men who are not fussy about how they wash clothes. Personally, I have clothes that will be killed washing them in commercial machines, so it's not just the hassle of the laundromat, the inconvenience of doing wash once a week, but being able to care for my stuff properly. You will need someone who is not too fussy. You might consider that the tenant who is fussy about laundry may be meticulous in other ways. Point being that by not offering laundry you are eliminating a whole subset of potential tenants who live by certain standards. Even though I made a comment about some men not caring about what machines they use, my ex-husband who is willing to rent a tiny studio and puts up with a lot of shortcomings in a place, will still not look at a place where there is not some on property laundry facility. He will share machines, including a co coin-op for multiple tenants, but he will not go to a public laundromat for all his laundry needs.
It's something to think about. If you could even offer laundry hook-up. a tenant could then buy a used washer. I think there are stack washer/dryers that don't require a 240 outlet.
As to pricing it out without a laundry, it's hard to compare to having a laundry. It's a whole lifestyle difference that is far more than the cost of using a laundromat. I would say at least a couple hundred a month. I think the laundry issue changes rental value a great deal, but it probably affects assessed property value negligibly, if at all (if you are using the 1% rule).
Best of luck with this. I mean my laundry feedback to be helpful, not a criticism of your rental. I think it would be well worth an upgrade if it is a cute rental that has a lot of appeal.
RE: Are rent prices going up or down? - Greg - 09-13-2009
A few years ago rentals were harder to find. Typically only a couple of columns in the HTH "houses to rent" section. Now with hundreds of houses sitting empty, and pages of rental adds in the HTH, I would guess the rents are going to come down(even more than they have). There are just not too many people here that earn enough to pay someones $1500 mortgage.
On the bright side; I think modest homes like yours will fare better.
punatoons
RE: Are rent prices going up or down? - missydog1 - 09-13-2009
I didn't weigh in on the topic title because I don't live in HPP, but I do know that rents are going down pretty much island wide. My son signed a lease in Waikoloa 18 months ago, after a year he negotiated a rent reduction. The landlord started having to pay some of the mortgage out of pocket, and sent a local realtor over who handles a lot of rentals, to appraise the rental price. He told the landlord that at the reduced price even he will not get a penny more in the current market, is in fact getting top dollar for what it is.
Even up in North Kohala where rentals are always scarce, prices have slipped. Also landlords are being less adamant about pets and stuff, from what I hear.
RE: Are rent prices going up or down? - konadave - 09-14-2009
I rent my house here in Mt. View. The rent was a little high when I signed the lease a year ago. But we liked it so we decided to pay the little extra. Now that our lease is ending soon I have been checking around the area and in the paper and the rents have come down ALOT! To be honest we will probably try and re-negotiate our lease to a lower rent. The house across the street is about the same size and it just rented out for $250 less than what we are currently paying. The people were paying about $100 less than us previously.
There is another rule of thumb that applies here in Hawaii that does not occur on the mainland and that is the distance from town. The closer to town the higher the rents generally.
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RE: Are rent prices going up or down? - EightFingers - 09-15-2009
"There is another rule of thumb that applies here in Hawaii that does not occur on the mainland and that is the distance from town. The closer to town the higher the rents generally."
It's true on the mainland as well. I've been a landlord for 21 years now and wanted to continue when I move to Hawai'i. After studying the rents on Hawai'i, I'm finding it's really not worth it.