Everywhere I look I see “For Rent” signs. Doesn’t matter what city I’m in. The decline in the rental market has affected cities across America.
Photo Credit: Jeremy Burgin
With the recession affecting the real estate market you’d think the rental market would increase. It’s assumed that homeowners who lost their homes due to foreclosure would become renters, but that hasn’t been the case. Families are doubling up.
Right now is the best time to negotiate for less rent or a bigger apartment for the same rent. Landlords are hurting and they sure as heck don’t want to lose tenants, so they’re offering sweet deals like free rent or reduced deposits to newcomers and paid utilities or reduced rent to current residents.
The economy has forced many apartment and home renters to downsize or move back home with their parents. A lot of people have lost their jobs and are struggling to stay afloat. Single tenants are finding roommates to help pay the rent and homeowners are renting out rooms to help pay their mortgage.
Photo Credit: Matti Mattila
I live in Modesto, California – a city that was hit hard by mass amounts of foreclosures. A year ago you’d find 3 or 4 pages of employment ads in the local paper. Today you’d be lucky to see 1 full column. Many of last year’s renters have moved on to other cities that offer jobs. Another trend I’m seeing is that former renters are finally able to purchase a home and their mortgage payments are sometimes cheaper than paying rent. In 2005, I rented a 2 bedroom, 2 bath home for $1200 a month. I couldn’t afford to buy back then because houses were out of reach by hundreds of thousands of dollars. But, the same house that sold for $450,000 four years ago is now selling for $180,000. With an FHA loan and a 3.5% down payment, the mortgage payment on $180,000, including tax and insurance, is only $1219 – that’s only $19 more than what I was paying on rent. And, for that monthly mortgage payment you’re able to buy a 4 bedroom, 3 bath home.
If you are renting or looking for a place to rent you’re in the driver’s seat; it’s a tenant’s market. Get the sweetest deal you can get and lock in for as long as you can.
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