Most and if not all of the country has seen the devastation of the real estate market. The nations weak economy has finally made its way into Texas which has effected Dallas Rental property and homes within the city but compared to the rest of the nation, it took a few years longer. The rental property market is affected from weak sales in real estate.
Rental properties in Dallas are seeing ups and downs in the rent rates throughout the last 6 months. In the last quarter of 2008, rental rates from 1 bedroom units on up to 3 bedrooms units and larger were in a decline until the beginning of December.Rents began to increase through at the start of December and continued through the month until January where it went flat .January to the start of March rent rates were stable.When rates began to fall in march they didn’t stop until April.
The part that is noticeable is the three bedroom properties have a larger rent rate spread than that of the one and two bedroom properties. It’s hard to know exactly why this is but one can speculate. The 1 and 2 bedroom rentals are for the most part cheaper to rent than the 3 bedroom and larger rentals. Higher rent rates can cause higher volatility for the fact that it puts more strain on the tenant’s finances which can lead to an eviction. If that happens a landlord sometimes has to find a renter fast to pay for the mortgage next month.In order to find a renter fast a property owner will cut rents to attract people into a property. If this kind of activity is going on throughout the community it could cause a more volatile price movement and in this case it’s the 3 bedroom and larger Dallas rental property.That being said, Dallas investment property has been known to be a more sound investment comparing to other regions of the country. Amongst the rental properties in Dallas the 1 and 2 bedroom rental properties in Dallas have much more stable rent rates.
Another speculation can have something to do with the high foreclosure rates across the country.If a family must move out of their home, they try to move into a larger lease property if they are coming from a larger home. Renters such as these generally move around a few times before they decide where they would like to live.When this activity occurs with larger rental property it can cause volatility.
The six months from November to April, 3 bedroom rental property rates rose to a level of $2,925 and to a low of $1,950 which is a 34% drop from the high. 2 bedroom units had a rent high of $1,575 and a low of $1,350 which is a 14. 2% fall from its high. 1 bedroom units had a high of $1,125 and a low of $950 which is a 15.5% drop from its high. 2 bedroom rental property within the scope of Dallas investment property had more stability for the investor over the last 6 months.
