Rental Property Investment and Ownership Blog Series: Part 1 - State of the Rental Market

Introducing our new 4-part blog series: Rental Property Investment and Ownership.  With record-high sales prices and record low inventories, it isn’t hard to notice how hot the real estate market is right now.  Long-time owners are taking the opportunity to sell, and people looking to break into the rental game are making their first purchases. The next few months we'll be sharing our knowledge and providing you with insights and advice for this new rental market.  This month we're focusing on the state of the rental market.

Part 1: State of the Rental Market

With sales prices being so high right now the first thing you need to be aware of is how rental projections are calculated. The rental market is separate and apart from the real estate market and has its own supply and demand characteristics governing prices.  Be wary of real estate listings including inflated rental projections designed to simply to support the sale.  With real estate prices rising so rapidly, rental projections can no longer be built as a percentage of listing price. These sort of guidelines no longer work.

At Benchmark, we always aim to give realistic projections and expectations based on how the home will produce in the rental market.  Seeing a generic rental projection in a real estate listing isn’t the same as getting a projection directly from the Property Manager.  We work with agents and interested home buyers to quickly turn over rental projections within 24 hours. And, our team of professionals base our projections on actual data and experience - not just a blanket percentage calculation off the listing price.

If you need a projection, just reach out to us at [email protected]. We’ll provide you with a projection based on deep knowledge of our own portfolio alongside outside data across all of 30A.  Have other questions about your investment property or our program? We're here to answer those as well.

We are thrilled to see that the demand for rentals is up. Losing Spring Break and a portion of the summer in 2020 was devastating to the hospitality industry. Thankfully, we're seeing across the board that summer calendars are nearly booked 100%.  People haven't been travelling in over a year and are excited to get to the beach again. We're happy to have them!  We have to temper this excitement as we look to the future. It seems unlikely that demand can remain this high for an extended period of time.  We think that prudent homeowners need to keep this in mind for the coming years as they look at investing in a vacation rental home.  While there isn’t much we can do about this uncertainty, being aware of it and planning for it, is the best way to set yourself up for future success.

As the world starts to open back up again and people are more comfortable with cruises, airlines, and international travel, fewer families may be planning a road trip to the Emerald Coast within the next few years.  But for right now?  We're going to welcome them with open arms, and show them why South Walton is a vacation destination they'll never forget.

Make sure to check back next month for Part 2 where we'll discuss certain things that you can do to help maximize rental income. For Part 3, we'll walk you through the onboarding process at Benchmark Management. Part 4 will focus on helping you decide which Property Management company is right for you.

Published on Wednesday, June 2, 2021