If you’ve ever rented an apartment in Chicago in the middle of the summer, you know it can be a challenge! Properties are listed and then rented very quickly, there are often multiple applicants vying for the same property, and you may arrive to view a property and find that there are several other people there to look at the exact same apartment. As a renter, securing a great apartment during the busy summer months can be very stressful!
If you are a landlord, you might be thinking, “This sounds great! I would love to have this much competition for my rentals. What’s the secret?” The secret is not much of a secret, really. It’s seasonality! What is seasonality, you ask? According to Investopedia, seasonality is “a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year. I am here to tell you that the rental market in Chicago is definitely seasonal. This means that there are certain times of the year that are much better for renting and other times when renting property is much more challenging.
In Chicago, for landlords the best time of year to rent an apartment is between April and September. This is when the majority of renters are seeking new apartments, as some move to the city after finishing school, and others who previously moved to Chicago in the summer have their leases expiring. If you are a landlord trying to rent your property in November, December or January, you will have a much harder time finding a tenant and may even have to accept a lower rent or unfavorable terms, as most renters do not want to move in the middle of the winter. The below graph from local rental listing website Domu.com shows the average number of days a property is on the market during each month of the year. According to this graph, July is the month when properties are on the market for the shortest number of days, on average. However, days on market are overall much lower in the summer months than in the winter.
In my experience, if you are able to push your leases to end during the spring and the early part of summer, you will be able to rent your properties faster and at higher rates. I’d specifically recommend aiming for an April, May, or June rental if at all possible. This is typically better than the later part of the summer as your property will be exposed to the greatest number of people looking for apartments who are flexible and can move in anytime in the summer months. By waiting until July, August, or September to list, rentals are typically still strong but you may lose out on a good number of tenants who have already rented places and moved in during the first part of the summer. Additionally, if you have to do work on your properties or they sit vacant for a month, you can sign a 12 month lease and it will still end during the peak months of the year.
You might be asking, how is it possible to get your leases to end in the summer months if you bought the property during the winter, or if you already have your tenants on leases that end during the off-peak months? This takes a bit more thought, but it is possible! One strategy is to offer tenants leases that end during the peak months, rather than always leasing for 12 month terms. You can either require that leases be 9 months when you are advertising a property in September, or offer incentives for people who will sign for your desired term. For example, if offering a property for rent in September, your ideal lease term would be around 9 months. You could offer a discount of $25-$50/month for people who will sign a 9 month lease while charging more for a 12 month term. You could also try for an 18 month lease if you prefer a longer lease term. The possibilities are endless, and you’ll thank yourself when your property becomes vacant in May and you have applicants lining up to rent!