Tuesday, April 29, 2014

Rental markets have risen 19% over the last year and despite a dip in quarterly growth,

Rental markets rise 19% for 2014

The past few years have been painful for the housing market; however, with the recent upswing in the economy the market has rebounded a bit. 

This is fantastic news for those who are determined to own their own place. However, for many people this sudden rise in interest will price them out of the market. This would normally put a strain on rental property as the demand has begun to aggressively chase supply.

Rental markets have risen 19% over the last year and despite a dip in quarterly growth, monthly median rent growth is picking up with steady year-over-year growth. 

This is regardless of lower incomes being reported in the first quarter also in spite of a decrease in home affordability. In this case landlords are limited in how much they can increase the rent, because of the lower incomes, but they are not suffering as demand makes up for the difference.
It’s a landlord’s market as long as inventory fits what renters are looking for. The second quarter is projected to see a slowing of the rental market as the new multi-family units are absorbed into the market. Gen-Yers are entering into the rental market too, but low income for this segment of the market may result in landlords being unable to raise the rent in many places.

Rising mortgage rates and high home prices are also factors that are forcing some people into the rental market. Average home affordability goes down as mortgage and home prices rise, kicking would-be home buyers out of the housing market. In many niche markets rent prices were down 1.2% over the last quarter, but they were up 16% from the previous year. 

These numbers make 2014 a potentially lucrative year for property managers and rental owners. Many of these niche markets are in big cities, places traditionally open to growth. However, the influx of the 80 million strong Gen-Y populations is skewed towards these larger markets. This is logical considering the proximity to job growth and wealth development available in the future.
The prospective talent pool of metropolitan areas assures that construction will continue in these markets until demand can be met. 

However, 2014 is not looking so bright for New York and Boston who won’t see the aggressive rent growth they have experienced over the last couple of years. These areas are saturated with prospective renters and the demand is still exceeding the supply. It’s going to take a little time for these markets to even out and reach the potential that is projected for the rest of the country. The housing market is still normalizing, showing strong growth in all but three of the 35 largest markets showing annual appreciation. Home prices will continue to rise at a slow, but steady pace. In the meantime, we should assume that rental prices will do the same over the coming months.


Thursday, April 24, 2014

Understanding the Risk of Renting to Own a property

In the past the American dream consisted of owning a home; with the unstable economy and a crashing housing market, that dream seemed unattainable for many people.

 However, things are looking up with a rebound in the economy and the housing market slowly climbing out of the rubble. Many people may be interested in owning a home, but the recovery is slow and a certain sector of the population may not be capable of attaining a loan or plunking down a hefty down payment. One option to circumnavigate this issue is rent-to-own housing.

 Some of the perks to rent-to-own are: buyers can build credit and save money during the rental period and depending on the contracts a renter has the right to change their mind. 

On the other side, some of the disadvantages may be enough to send potential rent-to-owners running for the hills. There is an upfront option fee that generally consists of a weighty down payment consisting of a percentage of the selling price. 

The rent may be higher than the equivalent property in the neighborhood and this is because of rent credit that is applied to the option fee and ultimately becomes part of the seller’s payment. Also, if the seller fails to pay the original mortgage payment, the property may be foreclosed on and the buyer may be forced to move. 

The seller may get lucky and lock in a high price that generally cannot be negotiated once agreed upon; however, this can obviously go both ways if the neighborhood begins to flourish. Also, if someone else approaches the seller with a better offer, they cannot take that offer over the original buyer. All repairs become the buyer’s responsibility and at the end of the rent-to-own lease the buyer may still not be able to buy the house.

It can be a risky alternative to the traditional buyer/seller relationship, but to a motivated purchaser with spotty credit this situation can work out quite nicely. Because of the potential for loss on both sides of this agreement people interested in rent-to-own deals are strongly advised to seek the advice from separate real estate attorneys.

Statistics from 

Thursday, April 3, 2014

Rent or Own in Miami, your Choice !

Renting a property in Miami Florida

Renting vs. Owning; this is a perennial discussion for many people considering their options. One major perk of renting over buying is: location. Many people, specifically young professionals, won’t be able to afford to buyproperty that satiates every want, need and desire; however, they can afford to rent a place that may meet most of their criteria.
Think for a minute what a one bedroom apartment on, say, Miami Beach might cost. 

The median home value for Miami proper is $266,600 and that is a 24.1% rise over the last year; that shakes out to $371 per square foot. This is a huge step up in price from the $179 per square foot average for Miami/Fort Lauderdale metro areas. 

But, being that Miami Beach is centrally located to the bustling ports of downtown, Wynwood, Brickell and the business district, it may be ideal for a person to live there. Thus, renting a place in a centrally located and beautiful area is not only possible but much more affordable than buying. 

Also, consider the creature comforts that come with renting beyond one’s immediate means. If there is a gym in the complex, the likelihood goes up that it will get used more often.

This could lead to a better quality of life in the long run. Plus, consider the time spent enjoying the creature comforts an investment in quality of life. In a survey 43% of people reported that they were unwilling to date someone who lived more than 30 minutes away. 

 Living in the same neighborhood gives people common interests, living in the same complex brings those interests even closer together.

The time spent lounging at the pool or enjoying the gym is actually time spent getting to know neighbors and building relationships. Working and living in a community that represents where you aspire to be, may be the first step towards getting there.

statistics from Rent.com & Zillow.com