Apartment Investor’s Advisor – Winter Issue 2022
After a tumultuous 18 months of government directed rent freezes and eviction moratoriums, statewide ordinances have ended, and rents are moving higher to keep up with inflation.
A recent survey of 1,464 Marin apartment buildings by CoStar Group found that rents climbed nearly 6% last year in the county. At the same time demand for Marin apartments is strong with a vacancy rate of 2.9%, the lowest rate in the past ten years.
Local landlords should feel confident in their ability to raise rents this year. The maximum allowed by the state is 5% plus the CPI Index, which now stands at 4.2%. So, a total of a 9.2% rent raise is possible if you have not raised rents recently.
The CoStar survey found that the average rent per unit is $2,560 or $3.02 per square foot in Marin County. Three-bedroom units are the size with the highest demand, with an average rent of nearly $3,800 per month. In some cities in Southern Marin, three bedrooms are currently being offered for $3,950-$4250 per unit.
Two bedrooms are now averaging $2,800 per month, with one bedrooms available for $2,200. Studios are being leased for $1,600-1,800 per month.
With many first time buyers priced out of the housing market, Marin County rents should continue to rise in 2022 as demand remains strong for rentals in the current tightening rental market.
Editor’s Letter
I am looking forward to a very robust 2022 Marin apartment market with buyer demand remaining very strong! We already have new pending sales this month and its only January!
If you are planning on selling or exchanging this year, make an effort to raise rents to increase your valuation and do all the presale items required for a smooth sales process- items to complete with the help of your agent:
- Order a sewer lateral report and get an estimate for the work. Best case scenario for you as the seller is complete the work prior to the sale and you will get the best price for your property.
- Order both a pest and contractor’s report prior to sale so you know where the deferred maintenance items may be. Complete at least some repairs to decks, interior living spaces and water heaters. The cleaner the property the higher the price.
- If you are selling an apartment property-2 or more units-it is best to have at least one unit vacant and staged in order to give a positive first impression to the buyers.
- Note: many of today’s buyers are first time investors and they are looking for turnkey properties. Other, more seasoned investors will want a property that needs updating and rental upside. Any deferred maintenance issues can be negotiated from the price.
Contact me if you are thinking of selling and I can give you a thorough market analysis of your property, make suggestions for any improvements prior to the sale and guide you through the sales process. I can be reached at 415-302-7730 or email me at katherine@khiggins.com.
Marin County Apartment Market Trends For 2022
- Over $373 million in Marin County apartment sales with buildings over 5 units
- Average price per unit climbed to $376,000 per unit, with a medium CAP rate of 4.23%
- Only two large institutional sales, with majority of building sizes 5-20 units
- Retiring landlords and their heirs were the sellers of most sales in this category
- Many sales were off market or multiple offers on market sales showing continuing strong demand for Marin County rental properties
Marin County Apartment Sales 2021 — 2021 – 5+ Units & Up
