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I believe that some of the money in higher rental rates can be traced back to the liability insurance property owners must carry these days.
This past fall I had an opportunity to buy a 50% partnership in a small 18 unit apartment building outside of Denver. It was a unique situation with partners that didn't get along and a building that was designed as a 55 and above community with some deed restrictions, but in the end the liability insurance costs made it seem like a bad idea.
Maybe in my case it was higher due the the 55+ restrictions.
But, then again we must remember that everybody is fighting for bigger wages. Landlords have to charge more. No longer can the lawn mowing crew get young guys to mow and rake for $10.50 an hour because the can make that or more working inside at McDonalds or Starbucks. Then, when the lawn mowing (landscaping / snow shoveling) crew needs to be paid something like $15.00 an hour, the cost to do the entire property is higher and that is passed on to tenants in higher rents.
The supply and demand mentioned above clearly shows here in Colorado. We are 420 friendly (full retail ages 21+), and lots of people moving here. Compare Colorado rates the all the states around it. Interesting.
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