In this episode of The Same Day Podcast, Yonatan Schmidt, Keyrenter Property Management’s Regional Vice President of Sales and Marketing, returns to speak with Mat Zalk about rental market summaries. Yoni talks about Keyrenter’s comprehensive rental market guide, rental market temperatures, and how to utilize this resource to invest in properties.
Rental Market Summaries: A Comprehensive Guide for Investors and Tenants
Yonatan (Yoni) Schmidt is the Regional Vice President of Sales and Marketing at Keyrenter Property Management, which has offices in Tulsa, Oklahoma City, and Arkansas. After working as a financial analyst at a private equity firm, he founded Tulsa Property Lad to offer clients a better way to buy, sell, manage, and invest in real estate. Yoni provides comprehensive Oklahoma real estate services and listings, supported by first-class customer service.
Here’s a glimpse of what you’ll learn:
- Yonatan (Yoni) Schmidt talks about Keyrenter Property Management’s rental market summaries
- How homeowners can utilize rental market summaries to invest in properties
- Rental market trends and fluctuations in Oklahoma
- What do rental market temperatures indicate?
- Positioning rentals in a competitive market
In this episode…
Rental market summaries effectively analyze market trends and renter behavior, helping investors structure their portfolios. How can you leverage this invaluable resource to invest wisely and position your properties in front of ideal renters?
With deep insight into Oklahoma’s rental market, Yonatan (Yoni) Schmidt observes that renting peaks in the summer and dwindles in the winter, with prices reflecting the demand. Generally, larger homes yield fewer returns because routine maintenance is higher for owners, and they have less demand because renters must consider the high cost of utilities. When investing in rental properties, Yoni recommends identifying markets with steady demand, adhering to minimum pricing standards to attract quality tenants, regularly maintaining your properties, and communicating adequately with tenants and prospects.
Resources mentioned in this episode:
- Mat Zalk on LinkedIn
- Keyrenter Property Management
- Keyrenter Property Management Tulsa
- Keyrenter Property Management Oklahoma City
- Keyrenter Property Management Arkansas
- Keyrenter Property Management email address: [email protected]
- Chris Lile State Farm
- Chris Lile’s phone number: 918-878-7771
- Yonatan Schmidt on LinkedIn
- “Paving the Way for Affordable Housing in Urban Communities” with Devin Howland on The Same Day Podcast
- “HVAC Systems: Maintenance Considerations and Pricing” with Kevin Evans on The Same Day Podcast
- “How To Raise Capital Using a Growth Perspective” with Michael Basch on The Same Day Podcast
Sponsor for this episode…
Chris Lile at State Farm Insurance:
This episode is brought to you by Chris Lile at State Farm Insurance.
Chris Lile at State Farm helps you protect your most precious assets and investments, including home and auto.
To learn more about how you can save double digits on all your insurance needs, visit dialliale.com or call Chris’ office at 918-878-7771.
Keyrenter Property Management:
This episode is also brought to you by Keyrenter Property Management.
Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.
The team helps clients build wealth while taking the headache out of property management.
That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.
To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].
Episode Transcript
Intro 0:05
Welcome to The Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.
Mat Zalk 0:20
That’s all here on the host of The Same Day Podcast where I connect with the top business experts in real estate leaders. past guests include Devin Howland, talking about economic development in the Fayetteville Arkansas region. Mike Basch Atento Capital talking about the world of venture investing in the southern Midwestern states and Kevin Evans of Liberty Air Services talking about HX systems, how they work and why they’re so darn complicated. Today’s episode is brought to you by Chris Lile State Farm. Chris Lile State Farm helps you protect your most precious assets and investments whether it’s your home and auto investment rental properties or other valuables called Chris Lile State Farm for a quick and painless phone call to potentially save double digits on all of your insurance needs. Visit diallile.com Recorders Office at 918-878-7771. Today’s episode is also brought to you by Keyrenter Property Management, Keyrenter Property Management we are a full service property management company helping our clients buy renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management. Listen, you only you know how hard it is to line up contractors to get to make ready done in a reasonable amount of time. After a tenant leaves the property contractors are busy the work seems to drag on forever and all that leads to lost rental income at key renter, we line up with dedicated vendors. So that turns can happen quickly and we get more money back into the pockets of our owners which include you and me that’s all I had no matter what rental you have a single family property. Condo townhome we have the single we have the management solutions, you need to go to keyrenterpmc.com dot com or email us at [email protected] dot com. Yonatan Schmidt Today’s guest is a VP of Sales and Marketing handling property management services across all markets. Keyrenter Tulsa, Oklahoma City northwest Arkansas in Wichita Yoni has been with Keyrenter for about four years and has been in the industry since he purchased his first investment property 16 years ago. Yonatan. Schmidt. Welcome to the show.
Yoni Schmidt 2:06
How are you doing? Doing? Well, thank you. How are you?
Mat Zalk 2:09
I’m good. Let’s talk today about the rental market summaries that you’re producing for our various markets. We’ve got one pulled up here from Tulsa, Oklahoma, I think probably worthwhile just to run through what we are going to use these for who’s going to see them what you still have. And then we can probably run through some of the data that’s on the screen at the moment. Sure.
Yoni Schmidt 2:32
Happy to be here and discuss these we started producing these because we believe that, you know, we we believe that owners and tenants, landlords and tenants should have access to information about the rental market that they are currently in. And we wanted to just provide some instantly insightful information. And also, along with this, we’re going to have some key renter takeaways for landlords and investors.
Mat Zalk 3:04
I see what you did there. Well, let me ask you can can owners actually use these data to figure out where to invest? Is that the idea?
Yoni Schmidt 3:17
The idea, yes, is that owners can use this information combined with what’s coming down the pike, which is currently in development and happy to discuss a little bit more in the future as we build this, but we’re going to have more comprehensive guides on areas to invest in each of the markets that we operate. So taking this in, in combination with the key renter, takeaways that will provide to landlords and long term buy and hold investors specifically for single family residential homes, and our guides, they can really drive their decisions.
Mat Zalk 3:58
Love it. So what are we seeing on the screen November 2023? We’re talking about a rental market summary. In Tulsa, Oklahoma, we’re showing a median rent of 1456 Does that give us an indication of a rent per square foot is this across all whether it’s a one bed, one bath, a studio or a five bed? This is all of the properties in our market? Great
Yoni Schmidt 4:22
questions. So all the information that’s displayed here aside for the market temperature is specifically for three bedroom homes and also in the Broken Arrow areas. So we are specifically looking at that because we know that those are some of the more popular asset asset types that people are, you know, looking to buy and rent out and also renters looking to get into what
Mat Zalk 4:50
do we think while we’re on the three bedroom, two bath house? What do we think about two bedroom, two baths and four bath four bed two baths in terms of renter demographics who goes in and whether our investors should be should be buying those properties?
Yoni Schmidt 5:04
Yeah, great question. I would say that traditionally speaking the three bedroom, two bedroom, two, the three bedroom, two bath, homes that I would say are roughly anywhere from 15 to 1800 square foot are the more popular ones, in terms of two bedrooms or four bedrooms. Right. Those would, of course, you know, be in demand for the people who are needing, you know, more or less space, single, single individuals, professionals, young professionals, young couples, you know, retirees empty nesters may opt into something a little bit smaller, like a two bedroom home, two bedroom, two bath home. Whereas four bedroom homes, right, depending on the size and the square footage, right would fit more for a larger family, right or for a midsize family. We have seen historically that the larger the size of your home, the lower the price per square foot because of the diminishing returns that, you know investors experience. And so when you’re investing in real estate is specifically in St. Louis, single family residential homes, you may not necessarily want to opt into buying a 5000 square foot home because there’s not going to be a ton of demand out there for home that also tenants have to take into consideration the fact that, you know, there’s a lot of upkeep there, right you have utilities and heating and air and gas and water. The larger the home, the larger the footprint, the more costly it becomes for tenants, and the less affordable it becomes for them to to actually rent it.
Mat Zalk 6:47
So it strikes me as similar to having a house on you know, two acres or five acres of land. Sometimes we have owners that come to us and say I’ve got this great property on five acres, well to an owner, five acres is beautiful, because you own all five of those acres, and you feel like you’ve staked your flag in the ground. But to a tenant, they go I’ve got now five acres to mow and barring the tenant that puts in a podcast with noise cancelling headphones and owns a Kubota zero turn tractor. And views that as therapeutic the average tenant just goes, Oh man, I’ve got another liability. And other thing I’ve got to do every week during summer, which is mow five acres of grass. So it’s not as easy to rent those properties. It’s more of a diamond in the rough or needle in the haystack scenario, when renting those properties. And we always say make your property such that we can get a ton of people in the top of the funnel so that it kicks us out at the bottom, a really good tenant, you know, when we’ve narrowed down a huge pool into a single person. So okay, good. Thanks there. So we’re looking at median rent 1456 for November, that’s down month on month $34. But year on year is up $56. Which means Yeah, we’ve had we’ve seen seasonal decline is what that says to me. Even though we’ve had growth over the year, the time of year that we’re now looking at renting is pretty bad. So if we are an owner investing in property, we want to be closing in January or February or March that we can lease it in peak leasing season not closing in October and leasing it in November, is that roughly right? That
Yoni Schmidt 8:17
is right, just by the month over month, you know, negative change the year over year changes positive, which would you know, suggest a long a stable long term appreciation in the rental values and also positive signs for landlords that are looking for these longer term investments. I would say that for owners who are looking to invest in in real estate, if you’re under contract right now, closing in December, right you you may be looking at renting the house out sometime in January, potentially even early February, just because we know that average days on market are about 41.
Mat Zalk 9:01
And I mean that also speaks to the time of year right now demand for rentals are are is so much lower kids are back in school people are focused on Thanksgiving and the in the holiday season. They’re watching football they’re not necessarily spending their Sundays looking for rentals whereas in summer, they’re much more likely to be focused on moving into their next home if they are indeed a tenant looking for a new property. Yeah, despite that,
Yoni Schmidt 9:28
though, in contrast, you can see that broken arrow for example is at 26 days average days on market which for you know, tenants that are looking to rent and broken arrow, it may just mean that they need to act a little bit faster. You know, submit that application and get the ball rolling for owners who are looking for you know investment properties in Broken Arrow. It definitely means that the fast there is faster tenant turnaround, and it indicates a quicker turnover compared to Tulsa beneficial to minimizing Um, your vacancy period is especially important for long term profitability as you and I both know
Mat Zalk 10:07
that there are so many fewer rental homes in Broken Arrow, that means potentially fewer. I guess it could mean anything, it means fewer potential rentals on the market. It could mean more rentals on the market, though lower vacancy of those of those rentals, particularly in the season. So I guess it could tell us anything, but is it? Do you see a significant difference in the price of owning a rental in Broken Arrow visa vie Tulsa?
Yoni Schmidt 10:33
Yeah, I mean, there is a significant difference over $200 a month and median rent, right. So there’s there is quite a significant difference that could also lead us to believe that there’s a lot more opportunity in Tulsa that, you know, is is still available, the market isn’t completely saturated, and investors can still find those decent opportunities in this environment of high interest rates, you know, November of 2023, where, you know, if we’re just looking at, say, 30 year fixed mortgage rates, right, we’re advertising at right now, six, point 7.62. So, you know, as an investor, you’re probably paying a basis point over that eight and a half percent for an investment property, it makes it a lot harder to operate. Yeah, the question is whether you
Mat Zalk 11:30
just take this rate, and potentially don’t cash flow for a few years and then refinance in the future. At some point, maybe it even makes sense to do a commercial loan instead of a 30 year fixed federally backed loan, and then refinance into a federally backed loan at some point in the future as well. Yeah, cool. Let’s talk about market temperature, what is market temperature mean? On this chart? What does it telling us?
Yoni Schmidt 11:52
So the market temperature is basically based on you know, changes in renter demand compared to the national average. So for example, a hot market has increasing demand while a cold market has, you know, decreasing demand. So that’s
Mat Zalk 12:11
really the the and we’re talking here about tenant demand, right? For rental homes.
Yoni Schmidt 12:16
We’re talking here about tenant demand, correct. Okay.
Mat Zalk 12:19
So in Tulsa, there’s there is increasing tenant demand for four rental homes and in in Broken Arrow, it’s cooling. Now, this speaks a little bit in contradiction of what we’re seeing above and below, which is that there the average days on market is higher in Tulsa than it is in in Broken Arrow. How do we explain that?
Yoni Schmidt 12:39
Well, it may be in contradiction to that, but I think it’s in line with the fact that you know, there are they available rentals, right? So there’s more inventory, too. There’s more inventory to saturate there’s more inventory that tenants can come into. And that’s one of the reasons why you you’re also experiencing this site warmer market temperature in Tulsa and cooler market tanked China and broken
Mat Zalk 13:05
out. Right, so there are a few there, there are fewer available rentals, whereas they’ve got more choice in in in Tulsa than Broken Arrow. Yeah, let’s go down to some of the implications the Keyrenter takeaways from for long term investors, what are we? What are we saying here?
Yoni Schmidt 13:05
So basically, for long term landlords and Tulsa, right, we are noticing some sustained yearly growth, right. We talked about that despite month over month decreases we’re seeing year over year increases in the median rent, we can see a warm market indicator the market brings warmth means the market being warm means that there is a steady demand bodes well for long long term occupancy rates and potential consistent rental income, adequate supply and turnover in Tulsa 993 available rentals and an average of 41 days on market, healthy turnover rates suggesting landlords can find tenants within a reasonable timeframe. And without significant periods of vacancy right 41 days, though, is significant. I would add your your home should not be vacant for that long. Although it makes a lot of sense given the time of the year.
Mat Zalk 14:20
Is there? Is there something that landlords can do if if there are plenty of available rentals and you want your rental to stick out in a competitive environment? Is there something that a landlord can do to ensure that tenants are selecting his or her property instead of others? Yeah,
Yoni Schmidt 14:37
that’s a great question and something that we may consider adding in the future like what can you do for each of these key takeaways? What are the actionable steps for each of these? I think that the answer is generally Yes. You can always find some sort of competitive advantage in the market, right? My philosophy has generally been, you know, always make sure you adhere to some level of math minimum standards, right, you want to make sure that you’re adhering to those so that you can actually find high quality tenants. That’s one area of competitive edge. Another is to price your rental, say, call it a nickel or a dime under a market rate so that you can attract those higher quality tenants to come through the property and try to negotiate a longer lease term, right two years something in return for at
Mat Zalk 15:30
least 18 months during this period, so it doesn’t come back in again during November. Exactly,
Yoni Schmidt 15:34
I mean, you could take an 18 an 18 month lease, which would expire on a more favorable leasing cycle for the owner would yield a greater benefit to anyone who’s looking to rent out their house as a as a landlord. Other than that, of course, just like maintaining your property, communicating with prospects and your tenants, regularly, and quickly, being highly responsive, and informative and transparent, sending them all the requested information, right. Just generally being a good landlord, knowing how to operate a business like this is a competitive edge in and of itself. So I
Mat Zalk 16:17
mean, I, I also think that there are plenty of examples of poor quality photos on Zillow, you can go through and see where the lighting is bad, where the where angles are sideways, they just don’t demonstrate the the best of what that home has to offer, even though there’s potentially nice things inside. So having a professional take your photos, instead of going in with an iPhone, or a poor quality camera could probably be beneficial. There are tons of people online that are using really nice, high quality photos. And if those houses stick out visa vie, an investor who’s using an iPhone, then they’re less likely to get like, here’s a blurry first image, for example of a sideways angle interior photo of a house, you know, those are not going to show the property in the best light, there’s also very few photos. So there are five photos, it’s just not it’s not putting the property’s best foot forward, so to speak. These are the something that is that just looks bright and airy and beautiful. There are there are so many, there are so many competitors in the space that if you can just get a better quality photo, then you’ll you’ll attract more potential viewers to the property. Now, the downside of that as viewers come in and say, well, the photos look really good. But the property actually looks bad. I’d rather have somebody view the property than not view the property. And so if you’re trying to attract a tenant, let’s make sure that the photos are not super dark and terrible, but rather, are light and airy and and put the properties best foot forward. Yeah,
Yoni Schmidt 17:53
although you definitely don’t want to touch them up too much. Because, you know, that can definitely cause some sort of like misrepresentation when tenants are seeing these beautiful, beautiful photos that have been doctored and edited. And then they come into the house. And it looks completely different, which has actually happened to a client of ours. With another property management company that I scheduled the showing for them. They’re relocating their business from Argentina to Tulsa. And they were looking for a house they found one that they liked that’s outside of our management portfolio, I scheduled a showing and actually ended up going with them to take a look. And they were quite disappointed because those photos did not match up to reality. Interesting.
Mat Zalk 18:40
Interesting. What are we seeing in Broken Arrow
Yoni Schmidt 18:43
broken arrows, also strong year over year rent increase? We see that you know, the 80 $80 year over year increase indicates a strong rental market with potential for growth in rental income advantageous for long term investors call market dynamics. Despite these cool market dynamics, the increase in median rent year over year suggests that, you know the area may have long term growth potential. And, you know, landlords may need to be competitive in the short term to attract those tenants like we mentioned just a little bit ago. And then of course, the faster turnaround for for landlords. So you know on the flip side of this coin, if you’re a tenant who’s looking to rent and broken arrow, you might want to move a little bit faster.
Mat Zalk 19:31
And for tenants, what’s the implication? In
Yoni Schmidt 19:36
terms of Broken Arrow you know, key takeaways for tenants right expect to pay a little bit more tenants should be prepared for higher rents in Broken Arrow, especially given the significant year over year increases indicating trends towards higher rental costs. And then, you know, of course, we said this be ready to act quickly but evaluate those long term affordability that long term affordability and given the rising costs and rents you should make Consider long term leases and unbroken arrow, possibly locking in more favorable terms.
Mat Zalk 20:10
I love it. Thank you Yoni for being on talking to us about the rental market summary for Tulsa and broken air November 2023. When can some of our clients expect to see more of this information disseminated to their inboxes?
Yoni Schmidt 20:24
Yeah, thank you for having me. I think our first version for all four markets that we serve is going out here in November at the end of November. So that’s Friday, the 24th will have it drop on all of our social media, Facebook, Instagram, LinkedIn. And then the first full version of this is going to go out to our clients and our inaugural e newsletter coming out in December, the property pulse, which has lots of great information. It’ll bring a ton of value to our clients, I hope and a whole bunch of fun things that are going to come with the with the property posts every month, and for each of our markets. Awesome.
Mat Zalk 21:14
Unit attachment is the head of marketing and sales for Keyrenter Property Management Unit. We appreciate you being on. Thank
Yoni Schmidt 21:20
you. Appreciate it, Mat.
Outro 21:26
Thanks for listening to The Same Day Podcast. Tune in to a new show each week and be sure to subscribe to get future episodes