Why Rents Are Soaring Up Across The Country

Signs Of Rising Confidence In The Housing Market

Why Rents Are Soaring Up Across The Country

It’s a reality, rents are rising throughout the country and in fact, they’re outstripping home values. While most people might think this is just a problem in the cities, traditionally affordable places are growing very fast due to tech-related industries. Renters in San Francisco pay 15% more than they did the past year while renters in Denver are experiencing an 11.6% increase in rents.

This soaring rent prices may be due to the shortage of rentals. The vacancy rates in these places where rents keeps on rising are at very low levels. Why don’t I rent my property? That’s what every property owner is asking himself because the rental market seems promising. But that may not be the case if housing costs such as repairs are also rising.

“Successful entrepreneurs are givers and not takers of positive energy.” ~Anonymous

Rents Are Rising yet Homes Are Now Affordable To Many

The rental market is experiencing a lot of pressure because of the baby boomers and the Millennials. Baby boomers are busy downsizing while the Millennials just find themselves renting for longer because of low income levels that doesn’t allow them to save for down payment. The past housing crash has pushed away most of the would-be homeowners from owning a home. The housing market is unstable and that’s why one cannot risk buying a home that he/she might lose through foreclosures. Most people are also shifting to urban areas where renting us common, tightening the housing inventory more and more. For landlords, the monthly cost of property management be rising forcing them to raise rents. In the long run, all the costs are under the renter’s shoulder.

Vacancy Rates Remain Tight

Investors in the industry are shying away from building more apartments. During the housing crisis, few invested in building new apartments and when the market recovered, demand for rental homes increased but the inventory remained low. This is what made and it’s still making vacancy rates tight. To curb the rising rents, property owners should try to lower property management costs. Considering a cost effective property management company can help in curbing the soaring rental prices.

Who Is Affected The Most?

Home affordability just after the Great Recession has also contributed to this problem. About one in four renters in the U.S. channel at least half of their household income to monthly rent payments. And this are the people who feel the rising rental prices the most. High-income renters would’ve shifted to more expensive apartments or homeownership don’t feel the pinch. The solution to this problem is by loosening the vacancy rates to ease the pressure in the rental housing market. This is only achieved by building new houses which can take up to two years to become available, meaning the relief cannot be immediate. Real estate property management fee is not normally paid by the renter and this shouldn’t be considered as a major factor pushing rents high.

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