not a good time to be a landlord

[quietann]

So, I was out for part of the day with my friend Tom who is looking for an apartment for himself and all his cruft. He's decided on the Malden-Melrose-Medford area. He's been looking for a 2-bedroom.

Last night we looked at 2 relatively spacious, if slightly run-down apartments in a 3-family in Malden. The first-floor one would have been nice if the bathroom wasn't shoehorned in underneath the back staircase. The second floor one had a better bathroom, but a sucky kitchen and less space overall. Rents were $1100/month, after no takers at $1200. Landlord is a nice Middle Eastern guy who drives a cab, and lives on the 3rd floor. We also looked at the place where pookfreak lives, owned by klingonlandlady. Tom said it was perfect -- for a short woman :) It's a lovely place (I considered buying the house from L. when she was thinking about selling it a few years back...) But, I think the rent may have to come down a bit, especially since heat isn't included.

We met with a realtor in the morning who showed us 3 places. Rents had been dropped on those, too. Place #1 was $1100 I think, in Revere near the blueline. It wasn't terrible except for having a sliding glass door directly in front of the bus stop outside... big security risk. My guess is that they'll be down to $900 by the time they rent it. #2 was a pretty nice apartment in a very odd building that looked like it used to be a hotel... they'd basically formed apartments out of 3 hotel rooms. $1200, and I think they'll be lucky to get $1000, eventually. #3 was not really what Tom was looking for, but a reasonably sized 1-bedroom right by the Wyoming Hill commuter rail stop in Melrose. The owner had called the agent because they are anxious about getting it rented, and agreed to drop the rent to $800, "because $800 is better than nothing, which is what you are getting now." The realtor told us that her office has been turning away landlords, because they have so much unrented inventory right now.

Tom looked by himself for the rest of the day, and got to practice being a nice Italian guy with the Italian realtors (it sounds like a kick... all these guys know each other, and I think everyone has their hands in everyone else's back pockets. Tom even had someone trying to set him up with his daughter!). He has 3 or 4 places to look at tomorrow for a second time, with my help. Rents all either have been dropped or agents have said they will try to drop them. Most have the owner paying the realtor's fee.

My conclusion? It sucks to be a landlord right now. My guess is that a lot of owners have been paying their mortgages with rental income, and they are going to have to start paying some of the costs themselves. There are a LOT of nice, vacant apartments out there right now.

Comments

[klingonlandlady.livejournal.com]

Au contraire, I think it's just getting back to normal after the outrageous highs of the last few years... 0% vacancy is NOT normal. If the prices slump a bit it's to be expcted. But overall I think Boston still generates more new people than new housing, so unless you bought during the price boom and leveraged yourself too far, it can't get all that bad.

[lyonesse.livejournal.com]

speaking as a landlord, i don't think it sucks. i think the market in the last few years was just complete madness, and things are probably returning more to "normal" both in terms of rental prices relative to property values and in terms of vacancy rates.