Bidding wars among prospective renters are no longer surprising with occupancy rates at record highs.

Bidding Wars for Available Properties Now Common, Regardless of Asking Rent

Jonathan Miller, president and CEO of the New York real estate appraisal and consulting firm Miller Samuel, said that the market share of bidding wars soared to 19.8% of all Manhattan rentals in March 2022.

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Nearly 20% of rental properties in all large urban settings were leased for more than the landlord’s asking price.

According to Green Street, a real estate analytics firm, occupancy rates on institutional-quality apartments reached 96.7% in 2021 and single-family rental occupancies surged to 96.9%.  Additionally, people migrating to large urban centers are competing with existing renters looking to move to lower-priced rental units because their so-called “COVID deals” (rent cuts and free rent) are expiring.  The result?  Prospective renters, both existing and newbie migrants, have no choice but to compete for available units.

Landlords – Consider These Tips When Dealing with Bidding Wars

Bidding wars have been unknown territory for many landlords and managers, particularly private owners of condominiums, coops and single-family rentals who are facing multiple bids for the first time.

Here are some strategies to consider:

  1. Use Objective Criteria: Have prospective renters go through credit and background checks including a rental/income check and double check references. David Dweck, an agent and single-family rental property investor, said, “I rent to the most-qualified (resident) – it doesn’t have to be the highest price…the most qualified person gets the property.”
  2. Decide Ahead of Time Which Objective Criteria Are Most Important: Erin Wheelock, a licensed associate real estate broker with Keller Williams,said, “There’s high demand and low supply.”  In addition to using objective criteria (state above), Wheelock suggests that landlords/managers/owners look at the price offered, the start date and whether or not the prospect will cover the brokerage commission.  One cautionary note from Ira Rheingold, executive director of the National Association of Consumer Advocates.  “Choose non-discriminatory (objective criteria) when making your determination…have a system in place…(this) is not a ‘feeling’ type of thing.”
  3. Consider Longer Lease: It might be wise to lock in a renter to a longer lease…particularly if that renter is making an above-market offer.  The rental market is surging now but who knows what the market will be in 12 months from now.
  4. Use a Real Estate Agent: It can be very stressful to wade through multiple offers under intense time pressure. Consider leveraging the skill and experience of a qualified agent on your side of the deal.

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