Falling Rent Great for Renters
Renters can now look forward to better times as rent prices have fallen to all time lows. Rent prices fell to a record 3.5% over the last year due to apartments remaining vacant, which may mean that new renters will no longer have to apply for a personal loan to pay the typical move in payments for the homes they choose. The nationwide vacancy of rental properties is currently pegged at 7.8%, up from 4.8% in 2007.
Reason for price drops
One of the main reasons why rental prices are falling is attributed directly to the high rate of unemployment, which currently stands at 10%. People living in apartments or other rental properties who are faced with job losses are needing to move, because they cannot pay the rent anymore. They must move in with relatives or look for alternative housing arrangements. One other reason that is playing a role in the rental prices dropping is because home owners cannot sell their houses, due to the sluggish economy. Instead, they prefer to rent their homes in the hope that things may improve in the near future.
Freebies prompted by the vacancies
Rental management companies are facing tough times in order to get residents for their properties. Gone are the days when they could demand, and get, prices and terms of their choice before renting out a property to a tenant. They now must resort to offering freebies to lure tenants, such as offering up to six months in rent free accommodation or even new appliances and flat screen TVs. Some are even offering gas cards of up to $100. A prospective tenant no longer must worry about saving up money or finding other ways to meet the move in payments through personal loans. Competition among landlords and property management agencies is a factor in the rental price drops as they are looking to grab as many tenants as possible. Some management agencies are also taking care of broker fees, which normally account for month’s rent being paid to the brokers. Looking at the current scenario, it seems that tenants can look forward to good times in 2010.
Good opportunity for tenants
For the hundreds of people looking for apartments, condos or homes of their choice, location is perhaps one of the best opportunities to look for a bargain. Tenants making high rent payments may be able to move into cheaper places, taking advantage of all the freebies that are being offered, while others may finally have their choice of great homes, which they may have avoided previously due to high rent. Things are not the same for landlords and management agencies who complain that nearly 5% of all tenants skip out without paying back rents that are due. Landlords are also grappling with increasing defaults on their own mortgages, and as things stand, it may be the landlords and management agencies that will soon be looking for personal loans rather than the tenant.
