Monty’s Answer: Hello Bruce, and thanks for your question. No one wants vacancies. Being cautious about the decision to raise rents is prudent. The key to your decision to raise rents is much closer to home than what is happening in the state. Local market research in the category of your properties and similar neighborhoods may hold the answer to the question.
You can determine the answer to several questions by conducting some basic research. The information will provide
The City of Portland may have information that can help. I did not have the time to research the site, but Housing Connections may be something to study. Contact them and learn what they know, it may help. There is also a department of the City of Portland named the Portland Housing Bureau. I would not be shocked if these two entities can save a lot of time understanding your market. They may know how many apartment units exist in your neighborhood and have other information that would be valuable. Often, cities offer incentives to landlords or attractive financing programs to improve the housing stock.
Learn how many units similar to your exist in your quadrant of the city. If a quadrant seems too large, take a smaller bite within a 1/2-mile radius of your units. What is the vacancy rate? If the vacancy rate is 50%, it may not be a good time to increase the rent. If the vacancy rate is 2%, it may be a very good time to increase the rent.
Another tactic is to become a “secret shopper.” Many businesses in many different industries utilize secret shoppers to understand what the competition is doing. Some real estate owners do this as well. Pick a day of the week and search for all the similar units found advertised for rent. Search all the different sources a person looking for an apartment could use. Find out the address, keep the phone number, size and amenities and what they are asking for rent. The more units found the better. Hire someone; put your kids to work. If you could find 50 or 100 units it would be great.
Assume 50 apartments for rent were found from all sources. Now try to narrow the list down by most similar type neighborhoods. Drive by the 25 units that seem like the best comparables to your units. Now stop!
Put the list in a drawer and wait a week. Now call back