Vacancy Kills Cash Flow. Here’s How We’re Fighting Back
Staying informed is the key to making smart investment decisions. This month, we’re looking at Houston rental market trends, Emerson portfolio performance, and practical strategies to protect cash flow and strengthen long-term returns.
📊 Portfolio Performance at a Glance
Rent Collection Rate: 93.4% (vs. 92.6% Houston average)
Eviction Rate: 1.2% (vs. ~9% Houston average)
Occupancy Rate: 88.7% (vs. 90.8% Houston average)
Rent collection continues to hold steady in the low-to-mid 90s. While this matches the broader market, our goal is always to exceed it. A key focus area right now is Houston’s new eviction laws, which are reshaping how quickly owners can remove non-paying tenants. We’ll provide a detailed breakdown of these changes later this year.
Evictions are up slightly compared to past years, though our rate (1.2%) is still dramatically below the Houston average of ~9%. We’ll be conducting a Q4 review of all evictions to refine policies and stay ahead of the legal curve.
Occupancy has ticked down since peaking at 95.7% in July, driven mostly by condos and small multifamily units in less desirable submarkets.
Takeaway: Focus on making your property stand out with great presentation and proper pricing. And if you’re not a client, review your eviction policies now to ensure compliance with the recent changes.
📈 Houston Market Snapshot
New Listings (HAR): 6,188 → 7,415 (+19.8% YoY)
Average Rent: $2,410 → $2,412 (+0.1% YoY)
Average Days on Market (DOM): HAR – 35 days | Emerson – 18 days (48.6% faster)
The trend is clear: more inventory, flat rents, and increased competition. With nearly 20% more listings than last year, tenants have more options and are becoming more selective.
At Emerson, our leasing speed is cutting through the noise with 18 days on market vs. 35 for Houston overall.
Investor insights:
More supply means tenants can afford to be picky. This is why we’re strict on Rent Ready Requirements!
Flat rents put cash flow under pressure, so reducing vacancy and controlling expenses is essential.
Leasing speed matters. Every extra day vacant costs money.
Remember: Vacancy kills cash flow.
🛠️ Maintenance Update
Median Speed of Repair: 3.7 days (vs. national average of 6–7 days)
Resident Satisfaction: 4.7/5.0
Work Orders Cancelled: 74.8%
We resolve maintenance requests in just 3.7 days, far ahead of the national average. Speed of repair is one of the strongest predictors of lease renewals, which is why we track it weekly.
Resident satisfaction has been consistently high this quarter, with a perfect 5.0/5.0 score nearly half the time!
The biggest surprise? Nearly 75% of work orders were cancelled. But instead of wasted effort, this actually saved owners money: most cancellations were pest control (tenant responsibility) or AC issues resolved in-house at no cost.
Takeaway: A knowledgeable management team that knows the tenant responsibilities, as well as how to troubleshoot, can save you thousands each year.
💬 Owner & Resident Satisfaction
Owner Retention Rate: 97.1%
Lease Renewal Rate: 69% (vs. ~55–65% national average)
Owner retention dipped slightly last month, though nearly 60% of offboards were initiated by us because the properties didn’t meet our standards. We’d rather grow intentionally than manage anything and everything.
Lease renewals fell from above 80% last month to 69% in August. After reviewing each case, every non-renewal was due to lifestyle changes, not performance.
Why it matters: Renewals are one of the strongest tools to protect cash flow. Each renewal saves on turnover costs, leasing fees, and vacancy time.
📸 Value-Add Spotlight
When it’s tough to buy new properties, look for opportunities in your current portfolio.
2023 Rent: $1,775/mo
2024 Rent: $1,895/mo
2025 Rent: $1,945/mo
That’s a 9.6% increase over two years, even as much of the market has seen rent compression. For this investor, it means an extra $170/month (or $2,040/year) in cash flow.
As my mom always said: when life gives you lemons, make lemonade. In today’s market, that means squeezing hidden value out of the properties you already own.
🧠 Owner Insight of the Month
Use caution when deciding whether to sell or when factoring appreciation into your next deal.
Across the South, home prices are seeing modest compression, while the Midwest shows growth. In Houston, one-third of listings have price cuts. That sounds alarming, but remember: the South saw the steepest gains since 2020. Today’s pullback looks more like a healthy rebalancing.
Some analysts believe this correction could last until 2030. Unless you’re forced to sell, holding for the next 2–5 years may be the smarter move.
Even with affordability near record lows, the fundamentals of rental real estate remain strong.
Final Thoughts
The Houston rental market is competitive, evolving, and full of both challenges and opportunities. Whether it’s keeping properties rent-ready, troubleshooting maintenance to save money, or holding through a rebalancing housing cycle, the fundamentals remain the same:
👉 Protect your cash flow, manage vacancies aggressively, and look for hidden value in your current portfolio.
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