Hello Residents,
As we approach the time for lease renewals, we want to have an open conversation with you about the rental market in Oxford and how it affects your lease renewal, particularly concerning rent increases. We understand that any change in rent can significantly impact you and your family, and we want to help you navigate this with as much information and understanding as possible.
Why Rent Increases Happen:
Much like any other market, the rental market is subject to changes influenced by various factors. In the past year, we've witnessed an unprecedented surge in rental rates in Oxford, driven by several elements:
University Growth and Market Trends: The student population at the University of Mississippi is growing at historically high rates. Meanwhile, Ole Miss is not building on-campus housing to match the increased number of students, which pushes more students off campus. This demand for off-campus housing pushes up rental rates. The demand for second homes and Airbnbs has removed more inventory from the long-term rental market, driving the demand higher. For example, properties in certain segments of the market (particularly condos that students rent) that rented at $2,100 15 months ago are now reaching $2,550 to $2,700.
Operating Expenses: The cost of running and maintaining a property, known as operating expenses, plays a crucial role in determining rent. These expenses encompass a wide range, including taxes, insurance premiums, management fees, maintenance costs, and more. For example, we've seen instances where insurance rates alone have increased by $100 per month. Such hikes in operating expenses are a key factor in rent adjustments. Additionally, with property values rising substantially over the past three years, tax rates are climbing. This is the inflation that has occupied the media for the last three years, but because we're locked into a lease for 12 months, it takes much longer for that inflation to trickle down to your rent. We have to compensate for increases over the last year that were not anticipated and try to plan for expected increases during the coming 12-month term.
Our Approach to Rent Increases:
At Cissell Management Company, we believe in fair and transparent communication. While we recommend that our property owners offer a discount to our existing residents, it's important to understand that even with an increase, the owners often forgo a significant amount of potential income to retain good residents like you. For instance, while substantial, a proposed increase from $2,100 to $2,400 is still below the likely market rate of $2,550 - $2,700. The property owner is effectively writing you a $1,800 - $3,600 check over the next 12 months.
Early Lease Renewals:
In Oxford, the student rental market significantly influences our lease renewal timeline, impacting all properties, including those not rented by students. As the market evolves, we've observed a trend of prospective residents beginning their search increasingly earlier each year. Unlike other management companies that may set renewal deadlines as early as November for leases starting the following August, our approach at Cissell Management Company is to extend these deadlines as feasible, offering greater flexibility to our current residents.
Our renewal deadline is typically set for February for properties that are likely to be rented by students. For all other properties, the renewal dates are adjusted according to market demands. This staggered approach allows us to balance the needs of our residents with the necessity of initiating the marketing of properties in a timely manner, ensuring we attract reliable and responsible new residents.
We understand that a rent increase is not just a financial adjustment but also an emotional one. We encourage you to reach out to us with any concerns or questions. While our primary responsibility is ensuring that the properties remain successful long-term investments for the owners, we deeply value your tenancy and strive to balance these interests.
We hope this explanation provides clarity on the reasons behind potential rent increases and the early renewal timelines. Our commitment to open communication remains strong, and we are here to support you through this process. Please don't hesitate to reach out if you have any further questions or need assistance.
Thank you for your continued trust and for being a valued part of our community.
Sincerely,
Josh Cissell and the Team at Cissell Management Company
