7/24/2017

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The High Costs To Rent

With the economy still struggling to improve, the costs to rent has increased dramatically.

When you rent a house, apartment, mobile home, condo, townhouse, or any place to live, the costs to rent usually increases or decreases with changes in the economy. This is a prime example of how the rental market is influenced by the economy.

When the economy is growing and jobs are plentiful, the demand for rental properties decrease because more people can afford to buy homes. This drives up the number of vacancies thereby forcing landlords to lower the prices they charge for renting their properties.

On the other hand, when the economy goes into a recession and large numbers of people lose their homes through foreclosure, the cost to rent homes and apartments rise. In this scenario, many people lose their jobs, their homes, and builders have to quit building new homes because there is no one to buy them. This forces vacancy rates to go down and rents to go up.

With the economy in a tailspin, landlords are using this opportunity to increase rents to record levels. This is not a localized phenomenon. Rents are rising across the country and in certain areas, rents are overtaking the costs to own a home.

Today, rentals across the country are averaging over $1,000 per month for a one or two bedroom apartment and houses are renting for much more. Of course, if you live in larger cities or more expensive neighborhoods, rent is going to be much higher.

The housing market is not expected to pick up any time soon thereby making the apartment rental market very lucrative for the foreseeable future. Landlords are finding that there are many so many potential renters that they can pick and choose who they will let rent their properties.

Although interest rates are lower than they have been in decades and houses are selling far below what they were selling for just a few years ago, with so many people out of work and with those who are still working but have low credit scores, there is little hope that the housing market will recover any time soon.

People who have lost homes to foreclosure are finding that they won't be able to buy another home for years to come. Although many of them are still working, their credit problems are keeping them tied down to the rental market. And damaged credit means they have to pay a premium or put down a bigger deposits to secure a place to rent.

The poor are especially hard hit because now they are having to compete with people who have jobs and good income but can't buy homes because of poor credit. It may take a while for the economy to improve, so low vacancy rates and high rent may be the norm for a few more years.

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