Did you just graduate? Maybe you have always lived with your parents, and now want to move out and start your own independent life. Enter the rental market, but before you do, read what we have for you.
The competition levels are really high
Rental properties have been in huge demand ever since the financial crisis of 2007. That was the time when millions of people across the country had to go through foreclosures and short sales, and had no homes by the end of it. All these people turned to the rental world and moved into any units they could find.
According to the chief economist of a reputed real estate website, there were 6 million renters and only 2 million homeowners in the years between 2007 and 2013. What about now? The economy has improved and people are relocating because of their jobs. What is the net effect? The demand for rental units has risen, and you will have to face a lot of competition.
Renting is expensive
Renting may be convenient for your lifestyle, but is it convenient for your finances? In most areas, you might find it difficult. You know that if your rent is more than 30% of your monthly income, it is unaffordable. In over 90 cities, the median rents are more than 30% of the median gross income.
Will the situation improve?
We cannot say for certain, but even if it does, it is going to take time. Existing rental units are already filled up, and though new units are being constructed, builders are facing troubles in forms of permits and approvals. Even if these units finish on time, you can expect the rents to be high because they will be brand new.
Should things continue at the same pace, we will not be surprised if demand out paces supply. And when this happens, rents will increase on the older units as well.
And by the way, buying is still economical
A survey by a reputed real estate website claims that between buying and renting, you will be better off with being a homeowner in the long run. Please note that this applies to most of the areas in the country, but not all.
If your credit scores are not good or you do not have enough down payment; you will want to turn to renting, but get ready to face the challenges.
