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The rental market is constantly changing presenting new challenges for renters and property owners alike. Depending on the economy, the events going on in the world, and the way of life that mainstream society subscribes to all influence how the rental market functions. Whether you are a landlord or a renter, here are five things to know about the rental market so you can make informed decisions about your rental agreements.
1. Vacation Towns Are Expensive
The idea of living by the ocean sounds nice in theory. While you’ll save a bundle by renting an apartment by the sea instead of purchasing a $5 million home by the ocean, you may be surprised to see just how costly vacation town apartments are, even for studio apartments.
Vacation towns have a strong tourist economy which means that during the prime seasons, prices go up. You’d be lucky to find an affordable rental property alternative, such as a short-term stay during the off-season. If you want to live by the sea full-time, you’ll need to pay more than you would in a noncoastal city.
2. Prices Rise As An Area Is Developed
If you live in an area with developments emerging, don’t be surprised if your rent goes up. The more commercialized an area becomes, the more expensive it gets for renters. At first, you might only see slight rises in your rent, but rent can become unaffordable over time. Make sure you’re comfortable applying, as landlords in these areas are likely to check eviction record reports to ensure they’re getting reliable renters for these up-and-coming areas.
3. Rental Market Is Relative
Although prices may be higher in certain areas, the minimum wage usually reflects these changes, which means that it is more affordable to live in an expensive place if you work in the area. This can be good news or bad news, depending on your job.
If you are a digital nomad and your company is out of state, you may not make enough to live where you’d like to and live like a local. Watch out for imitation rental listings to avoid getting scammed if you’re apartment hunting in expensive areas. Don’t be fooled by the fake pricing, instead, of a rental price seems like it’s vastly undercutting other properties in the area, chances are it is too good to be true.
4. The Rental Market Is Inconsistent
You may notice general price trends, but you’re also likely to find hidden gems and over-the-top pricing for apartments anywhere you look. This means that apartment hunters may find a diamond in the rough even if they live in an expensive city. You might have to sift past the overpriced 600-square-foot so-called townhouses first.
Try to look for independent landlords by looking for signs posted in yards with direct contact numbers. Sometimes, this old-school approach can be an effective way to weed out the competition and save you money.
5. The Home Ownership Percentage Plays A Role
Many factors influence the cost of rent. Location is a primary factor, as well as the percentage of home ownership in a given area. Often, in areas where most residents own their own homes, rental opportunities are scarce, to begin with, and the available properties are more expensive than they might be in an area with a different market. The next time you’re looking at affordable places to live, be sure to factor in the homeownership percentage. This way you can ensure that what appears affordable on the surface isn’t more expensive than you might think.
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The Bottom Line: Renting Is A Challenge
The rental market is a jungle. If you want an affordable apartment, stay diligent in your search, and review the above five trends so you can make sound decisions about your rental options.
