Real Estate Trends Renters are seeing so Far in 2016
As the second month of 2016 starts to come to a close, people are beginning to notice some of the real estate predictions that were made in late 2015 are already coming true. In no demographic is this truer, than in the renters. Here is a look at some of the predictions made at the end of 2015 regarding investment rental properties and how they are shaping up this far into the New Year.
Already Unaffordable Rent Prices will continue to Rising
As much as politicians might want to ignore the impending housing crises that are facing the United States, the fact of the matter is that more than 85% of the United States Markets have rents that go well beyond 30% of the household income. Because of the high rental prices that are crushing the majority of renters throughout the United States, it has actually become more affordable in most parts of the country to buy a house as opposed to renting.
This is becoming a real concern for real estate investors, looking to rent out their properties, and while the bottom line of what an investor rent’s a property out for is of their own discretion, the rental market always plays a huge role in deciding what that amount is.
There will be Less Incline to Rent
Because of the dramatic increase in the average monthly rent, there has been a noticeable reduction in the amount of people that are looking to rent, at least among those who have the option. For investors, this means that understanding the market, and the community that they are looking to invest in is absolutely crucial. Without a good working knowledge of both of those factors, the decision of where to invest could very likely end up costing the investor more money than they end up making in the long term.
Less Month-to-Month Agreements
Over the last decade, the amount of month-to-month agreements has been reduced dramatically. There are a number of reasons that this has been happening, the major one being security. Generally, with a month-to-month agreement there is no real lease to be signed, and therefore, no guarantee that the investor will be paid. Additionally, without a lease, there are no real rules and responsibilities set out and agreed upon by either party. This means that there is no guarantee that any issues that arise such as plumbing will be handled in a certain timeline, or by a professional. It also means that the landlord does not provide themselves with security in terms of who is renting out their property, as without a lease there is no signed document or agreement upon a set number of tenants.
As 2015 drew to a close, there were a number of predictions made regarding the rental market surrounding the positions and changes that both the investors and the tenants would have to deal with. As the New Year continues to unfold it will be interesting to see how these predictions stack up against reality, and where the rental market will be at the end of 2016.