With July now over, this summer has undoubtedly been the busiest season in our company’s history, and we should finish with the same strength and hustle for which it started.
Last November we said we would focus on initiating lease renewal conversations with tenants as early as possible. We concentrated on retaining tenants at maximum rents. We minimized vacancies by continuously monitoring and analyzing the rental market in real-time. All available apartments were leased quickly and for the highest rents possible.
Here’s an update on the results from our efforts thus far:
- 63% of our portfolio renewed in 2018.
- Of the 63% renewed, rents increased by an average of 3.5%.
- For the 37% turnover, we’ve kept the vacancy rate below 3%.
- In spite of newer, more challenging market conditions, we’ve increased rents of the 37% by 3%.
- Of the 37% who vacated, we did more than 100 turnovers, half of which were 24-hour turnovers!
Another improvement we’ve focused on is faster and cheaper apartment turnovers. So far, we’ve decreased the cost of the process by 26% year-over-year by investing in an in-house general contractor. We’ve spent a lot of energy transforming the often scattered, three-day process into a 24-hour streamlined military operation, and the feedback we’ve received has been positive.
High Fidelity’s growth has been positive as well. We continue to build our portfolio and staff at a steady pace of 27% year-over-year. As we develop and refine our skill sets, the number one focus has, and will always be on delivering an A-class service to our clients. We’re constantly expanding and creating roles, promoting from within and adding more in-house positions to eliminate third party vendors which results in reliable, cost effective service for our owners.
2018 Chicago Summer Rental Market Snapshot
A strong supply of new rental inventory has flooded the Chicago market in recent years and even more inventory will be added throughout 2018. With more than 9,000 new units added to the mix in 2016 alone, this has contributed to decreased/flat rents thus far for the year (a decrease of 6-8% annually YOY). These trends are expected to continue all the way through 2019.
What can landlords do to avoid vacancies in the present market?
Keep present rents flat or offer a small increase and list your unit at least 60 days out from current lease expiration date.
2018 Chicago Summer Sales Market Snapshot
While the rental market has seen flat or decreased rents based on abundant supply in the market, the sales market has experienced just the opposite. Demand is far exceeding supply by a large percentage in 2018.
Based on Midwest Real Estate Data Service data, month-over-month for January, there was a 17% decrease in sales inventory, ultimately bumping the average sales price of a Chicago property by 10.1%. Demand has continued to surge throughout the spring and summer months and the trend is expected to continue throughout the year.