Increasing Rental Home Rates

Today's Rental Housing Market

By LandCentral

Since the burst of the housing bubble in 2008, rental rates have continued to rise year after year — with little hope of seeing a reduction any time soon. While many see renting as more affordable than purchasing a home, the rising rates are causing budgetary strain among many renters.

Usually, the closer you get to a metropolitan area, the more expensive the rental rates. Plus, it varies urban areas. Deciding which town to live in often determines how high your rent will be.  In some cities, the cost of staying in an apartment can be as high as $4,000 a month, even though the U.S. average is $1,200.

In 2009, apartment vacancy rates were at around 10.9 percent. In 2014, they are hovering at 8.3 percent. This decrease in vacancies is having a large impact on rental rates. Because demand now favors property managers, they are able to ask potential renters to pay more.

Rental Rates

Housing should cost no more than 30 percent of a person’s income. However, in many cases, this ratio is not reality. With the rise in rental home rates, it is forcing many renters to exceed the suggested 30 percent and, in turn, it is causing them to struggle financially. It puts a strain on affording other financial obligations, as well as forgoing leisure activities.

If you are one of the many people searching for a rental, in a market dominated by property owners and landlords, here are some tips to find the right property at a price that you can afford:

  1. Search intelligently – there are many reputable sites to help you search for potential rental properties.  Some provide verified reviews, high-definition pictures and 3-D tours.  This will help you to minimize your time by not having to physically travel to each of the potential rentals.
  2. Look at comparable rentals – If you have your eye on a certain apartment, look up the rental rates in other areas with similar apartments. This will give you an idea of whether or not the unit is priced fairly, and it could also give you some negotiating power when you begin to talk terms.
  3. Get a cosigner or guarantor – With rates increasing so dramatically, many people do not have the income to be able to afford the apartment that they need or want. Many property managers are seeing a dramatic increase in the amount of applicants who do not meet the income requirements.
  4. You will have to sacrifice – Price, quality and location are the three, key things many renters look for when choosing their next home. With current rental market, you might need to make some hard choices. If you want to save money, you may need to sacrifice quality or location.  With a high demand and a low inventory, be ready to adjust expectations.

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