0:00 – Cold Open: Prices, Fraud & Slowing Rent Growth

If you've caught any of the previous podcasts, you'll you're now beginning to realize that I'm a genius uh and that uh I have the gift of foresight into the into the future. Uh because home prices are coming down.
So pervasive. I mean, it's stolen identities. It's everything. I mean, we get people who look totally legit.
They've got a legitimate looking uh payub, a legitimate looking uh ID. We can even run their credit, but come to find out the credit report or the credit has been stolen. They're using someone else's identity.
This is information and we do this all the time. If you've watched us for for any length of time, we give you information before it hits your average consumer. And that is that rental prices are beginning to slow in growth.

0:48 – Live Podcast Intro & Episode Overview

Okay, we're live.
We're live.
We are officially live. All right, we're trying this here for a first time. So, uh, if you are alerted to us going live, congratulations. You're about to catch the first, uh, Red Door Property Management podcast live version where we are going to go over the economic reports from the previous, uh, really 45 days is what I try to keep those uh, reports dialed into. We're going to go over the market reports which is going to include the data uh for October so that we can make predictions on what we're going to do in the investment market uh investment real estate market here over the the foreseeable future.
We're going to go over the question of the week where we're going to dial in questions that uh that I receive as a business development manager here with Red Door and uh in ways to maybe critique that question uh in order to generate the best possible response that's going to help you gauge the property management company that you're potentially vetting to determine if they're a proper fit for you.
Uh and then uh a new segment which is going to wrap up our four real segments which is going to be uh the property management bone head. Now this is going to detail real life experiences uh that either we've dealt with or that I've heard heard from from other colleagues in the industry uh that they've experienced and uh what decision they probably could have made better that was going to be a better result for not only the management company but also the owner.

So here we go. Well, my name is Chris Knight. I'm the business development manager here with Red Door Property Management. And although not uh my attire is not super professional, it is for good reason. I do have IU underneath because uh Indiana or Indianapolis uh in general is having a a beautiful uh athletic season both for IU University and both the the Colts, which are having a killer season. Uh it's only a matter of time before we end up in the Super Bowl this year.
Uh, so that's that's what this attire is. This is all good luck. This hasn't been washed in weeks. Uh, and it must remain attached to my body.

Uh, but yeah, Chris Knight, business development manager, and I'm joined with Mike Taylor here, uh, broker owner of Red Door Property Management.
How are you, Mike?
I'm doing excellent, Chris. I can't believe it's like early November. There's snow on the ground already, although it's going to melt, but uh, yeah, crazy.
Snow on the ground right now. And I think what, Monday or Tuesday, it's supposed to be 64 degrees. Uh, so don't worry, sunshine is right around the corner. So if you haven't got your Christmas lights up yet, which most of my neighborhood already does, uh, which is awesome. In fact, I've been hounding my wife to get our Christmas tree up and going, and she's like, "No, not until after Thanksgiving."
You're like instantly into Christmas. You're that guy.
I mean, not normally, no. But this year, you know what? Yes. Yes. All right. I know all the money that goes out around Christmas. And if I want the holiday spirit for, you know, 30 additional days, I think I'm entitled to that.
Got to get your money's worth, right?
Got to get my money's worth. Yes.
Yeah. So, I'm trying to get her to do that. Uh, we haven't done it yet. So, what do you guys like after Thanksgiving? That's when you throw the tree up.
Yeah. Thanksgiving. After Thanksgiving, nothing nothing goes up. It's a pretty strict rule at our house here.
Boring.
Nothing Christmasy goes up until after Thanksgiving.
All right, cool. Let us know uh you know when you guys put put up your Christmas tree. I'm very curious. I would assume that the majority of people watching this uh probably already have some type of a Christmas decoration up. I would bet. I would bet. Especially this year, you know, I mean, people's wallets are a little bit tighter. They're like, I want to I need some happy enjoyment going on.

But all right. All right. Let's get into let's get into the real uh the real meat here. Let's go over some economic reports. Mike, I think you might have one or two uh and then I know how I have one or two that I will quickly gloss over. Uh, and these are going to be economic reports that ideally are going to speak to the local real estate market. Uh, whether you're an active investor or you currently um have just a uh one or two rental properties here in the area.

0:50 – Rental Fraud Surge

Yeah. Um, and it's a little bit lighter this time of year. You know, it is November, so it's not like peak season, so there's not a ton. And sometimes we pull local data, sometimes we pull national data, uh, or national articles, uh, just things that we think are interesting to our investors or potential investors here at Red Door.

I've got a couple of them. Uh, one of them is it's a national story or it's actually not even a national story. It's a story specifically about Atlanta, but it's really appropriate for national and even here locally. Um, and let me just share my screen here real quick.

Um it's actually about um rental fraud and um it's it is specific to Atlanta, but we are seeing it here. So this is a this is from realtor.com. It says Rental fraud explodes in Atlanta luxury buildings as soaring costs push tenants to con their way in.

So, like I said, this is specifically for Atlanta, but they’re saying the high-end apartments as they sit vacant and affordability dwindles, property managers report a sharp rise in applicants falsifying income, employment, and even identities—all in an effort to secure leases they might not otherwise qualify for.

And here's a crazy stat: Graystar, the nation's largest apartment landlord, says up to 50% of rental applications in some Atlanta buildings are fraudulent. According to Wall Street Journal, other landlords also see the trend, citing a surge in fake paystubs, doctored bank statements, false employment verification letters—many of which are being sold through social media platforms such as TikTok.

And so, I mean again, while that is an Atlanta-specific thing, we are absolutely seeing the same thing here.

We have so many things that we have to have in place to identify these things. I mean, we run all of our all of our IDs through ID verification. We make them do a selfie so it double checks against that. The paystubs are vetted. The bank statements are vetted to see if there's any potential inconsistencies or if we think it's fraudulent.

So, I mean, this is not specific to Atlanta. This is very much a nationwide thing and something that we are seeing here and something that is… honestly it slows our process up because you have to verify absolutely everything. I mean sometimes we have to ask people for a Social Security card—like physically hold the card, show it with your face. The verification process is getting a lot more burdensome.

Oh, it absolutely is.

All right, so a couple things. Number one, we went over property management statistics in our last podcast where some extremely helpful data showed how dramatically fraud cases have increased in rental applications.

We see it every single day on the ground.

So check back to a previous podcast if you want to see the real data behind how active fraud is in the rental market.

Number two, I had an owner not a day or two ago who—after we received an application—said:
"It shouldn't take three days to run an application."

And immediately I’m like… oh man. Yes. Yes, it absolutely can.

Because when applications are submitted, we have to do everything in our power to confirm all the information:

• Driver’s license

• Real-time selfie match

• Paystubs

• Employment verification

• Bank statements

• Former landlord verification

And with AI, these documents are getting extremely realistic. So the only way to catch fraud is to be extremely thorough.

So yes—it can absolutely take 3 to 5 days to properly vet an application even if they appear well-qualified on the front end.

And again—it’s pervasive. Stolen identities, fake paystubs, fake bank statements… even when we run credit, sometimes we discover the credit file itself was stolen. It is real.

The days of just running a credit score and calling it done are over. You have to be a forensic scientist now.

14:02 – Balanced Market Shift

All right, last thing I want to mention on that is you'll see here—we are currently involved in completely revamping our website. And if you haven't checked it out recently, I highly encourage you to do so. We've got a couple of what we refer to as pillar pages, and they are absolutely incredible.

But just to get to the point here, one of the pages we've recently put up is our tenant screening page. This is absolutely incredible. If you have any questions about what our tenant screening process is, this is where you need to be. Or if you're curious about what screening should look like for any property management company you’re working with, check out that page. It details the entire process.

Now, with that said, let’s shift into the next economic piece.

15:00 – Balanced Market & Rising Inventory

This is a little bit of a teaser because we’re going to go over rental and sales data later, but this snapshot is important. It’s everything combined—an overview of all Indianapolis-area counties from MIBOR.

We’ve been talking about it:
The market is softening.

One indicator I love is Months of Inventory. It’s the absorption rate—if no new homes hit the market, how long does it take to sell through everything currently listed?

Right now, it’s 2.4 months.

When Chris and I started talking about this a year ago, it was sitting around 1.3 to 1.5 months, which was extremely hot.

2.4 isn’t crazy—it’s still a balanced market. But compared to the frenzy of the last few years, it feels slow.

Balanced feels unbalanced these days.

The only bright spot in the numbers is mortgage rates are easing, drifting from the high-7s closer toward the low-6s. That’s a meaningful improvement in affordability, especially compared to earlier in the year.

16:50 – Rising Inventory & Price Cuts

Going a bit rogue here—but you might’ve seen the talk about 50-year mortgages. I don’t have all the details yet, but it’s being floated as a possible affordability solution. We'll bring more next month.

But here’s the point that matters today:

Home prices are starting to come down, and inventory is building.

This headline from HousingWire says it all:
“Indianapolis sellers cut prices on majority of homes as inventory builds.”

Price cuts are now hitting 56% of listings.

As inventory rises and absorption slows, sellers are getting nervous if their home isn’t gone in four and a half days like last year. So they’re cutting prices.

But that fear is your advantage if you're an investor:

➡️ This is the best buying window we’ve seen in years.
➡️ Negotiation power is high.
➡️ Inventory is up.
➡️ Sellers are jumpy.

And even in new construction, builders are slashing prices and offering incentives.

But—if you’re picking up a new build as a rental, be realistic.
Even with lower rates, covering the mortgage out of the gate is unlikely due to:

• Insurance costs

• Property taxes

• HOA dues

• Saturation in certain suburbs

• And that leads to the final key point…
  
  19:00 – Slowing Rent Growth & Winter Leasing Reality

  So that’s going to take me into my last point here, and then I’ll shut up—and that is tenant affordability.

  I’m going to give you the scoop on what’s happening here on the ground, because if you’ve watched us for any length of time, you know we give you information before it hits your average consumer.

  Rents are slowing in growth.

  In fact, what I’m seeing day-to-day is that we’re needing to do more price reductions to place tenants faster. That’s something you need to be prepared for if you're about to list a rental. Rents are not growing at the fast pace they were. And on top of that, this time of year always adds another layer of slowdown.

  Now Mike, add your thoughts.
  Let me add two things to that.
  Time of year—November is where you really need to keep this top-of-mind. We’re entering the leaner leasing months. We’ll show this in the graphs in a minute, but December and January are usually the hardest months to rent a property. On average, rents come in lower during those months compared to June and July. As an investor, know that’s coming and adjust your expectations accordingly.

  And circling back to the builder point—timing also matters for negotiation. Builders have end-of-month, end-of-quarter, and end-of-year goals. My wife worked for a builder—they absolutely get more motivated during those windows. So if you’re aiming to buy new construction, end-of-year is a strong strategic time.

  This is gold—real investor insight.
  All right, I think that wraps our economic data. You got anything else, Mike?

  Nope, that’s it. A bit of a light month.

  Yeah, end-of-year always is. One last thing before we move on—because I get this question constantly:

  “Is it difficult to rent my property in the winter?”

  And the real answer is…it depends.

  The biggest slowdowns I see are:

  • A week before each major holiday, and

  • A week after each major holiday

• Right before and right after Thanksgiving and Christmas—nothing moves. You won’t see an application come through. But outside of that specific window, winter leasing is more stable than people think.

  Weather can be a factor, sure, but overall—besides those two dead-zones—I find winter leasing reasonably consistent.