Bidding wars: Desperate South Florida renters offer to pay even more than the landlord wants
Even finding a place to rent is starting to turn into a battle.
Renters in South Florida are offering hundreds of dollars more than the landlord is asking for, or they’re offering to pay a full year’s rent up front in order to obtain a lease.
The situation is further complicating a cutthroat real estate market. Homebuyers are spending well over the listing price for a scant number of properties; frustrated shoppers are resigning themselves to rent; landlords are jacking up rents to cash in; and now prospective tenants are fighting it out for a place they won’t even own.
Real estate agent Nathan Zieman, of The Corcoran Group in Delray Beach, watched a client get outbid to rent a townhome in east Delray Beach. Three other renters put in offers over the listed price of $2,600.
His client, Dylan Shine, continues to search anywhere from Jupiter to Fort Lauderdale, unwilling to overpay. “Everything seems to be pushing up and up,” he said.
Karen Johnson, a real estate agent and president of the Broward, Palm Beaches & St. Lucie Realtors, said she listed a rental home in Parkland for $3,800 and quickly got three offers to rent it for an extra $400 per month. Some people offered six months’ rent up front.
And Adam Docktor, a real estate agent with Compass in Fort Lauderdale, had a client who paid a year’s rent up front for a $2,350-per-month townhome in Fort Lauderdale.
Many of these aggressive renters had struck out on buying a home.
“Not only has the amount of people looking for a rental property increased, but the type of person looking for a rental is someone who was already prepared to purchase a home,” said Whitney Dutton, a real estate adviser representing landlords with the Dutton Group in Fort Lauderdale. “They have great credit [and] money saved up that would have gone towards a mortgage down payment,”
The demand has led to rising rents for the past year. The average list price for a rental in Palm Beach County in August was $3,108, up from $2,300 the year before, according to data from the Broward, Palm Beaches and St. Lucie Realtors.
In Broward County, the average listed price was $2,338, up from $1,988 in August 2020.
Property manager Benjamin Lipson, of Icon Realty in Fort Lauderdale, said people are bidding on rentals without even seeing them. A younger couple recently offered to pay $200 over the listed price for a two-bedroom condo in Miami and agreed to pay a year’s rent ahead of time, Lipson said.
People will do whatever they need to lock in a property, he said.
Experts attribute this phenomenon to a low number of homes for sale, forcing prospective homebuyers into rentals because they can’t afford the high purchase prices. But as with homebuyers, they’re getting outbid by out-of-towners moving in with more money.
“If you go online to look at something to rent and it’s gone in a day,” Docktor said.
When and if the rental market cools down remains to be seen.
“Rental rates will stabilize, but it will take a little,” Docktor said. “When it comes back down, it will still be hot.”
