“I’m just renting.”
How often have you heard this statement in the past few years?
Probably lots, as the percentage of Americans who are homeowners has dropped by 5 percent since it’s peak about a decade ago, according to the U.S. Census Bureau.
But pairing the modifier “just” with “renting” implies finding an affordable, desirable rental is easy.
Hardly. For one thing, with thousands more Americans renting, that means more demand, which usually translates into higher prices. In fact, more than half of housing experts recently surveyed by Zillow believe that rising rental rates will be problematic for the next two years.
And, rent costs rose 3 percent overall in the 54 biggest metropolitan areas in 2014, an increase of roughly $42, about twice the historical average, reports CoStar, an analytics firm.
But while rates have risen, so have the housing options. For one thing, the foreclosure crisis increased the supply of single-family houses for rent.
And, there’s been an “abundant new supply [of apartment complexes] that began coming to market in late 2013,” according to Hans Nordby, an analyst with CoStar. In fact, rising rent isn’t from too much demand chasing too little supply, believes Nordby. “Instead, 2014’s strong rent growth resulted from the types of new buildings and their locations – most were high-quality,” he says.
Set a Wide Search
Plug in “apartments for rent” or “houses for rent” and the name of the town or city into a search engine, and a myriad of sites should pop up.
Some sites are large-scale aggregators, listing many apartments, houses, or both, and are good for surveying the overall market. “Gather as much real-time availability information so that you can learn what the real market rates are across the board,” advises Michael Taus of ABODO, an online real estate directory.
To capture a complete view of what’s offered by independent rental owners, “drive through the neighborhood” suggests Doug Culkin, president of the National Apartment Association, and search “for rent” signs. And don’t forget to check heck out the newspaper and other local website and publications that have housing news and listings.
By scanning the landscape, you may discover ways to save, by sacrificing some amenities you can live without, or being open to other options. “The more open you are on terms, the more likely you are to find a great deal,” notes Diana Pittro of RMK Management in Chicago. “If you ideally want a one-bedroom, but there are lots of two-bedrooms on the market, you may find a better price [with more space],” she illustrates.
Moreover, adds Culkin: “More apartment management companies are using … the same systems airlines use to set airfare prices.”
With these systems, rents can rise or drop somewhat, even in the space of a couple of days. “If a company just rented three apartments yesterday, they might not [drop a rent charge ] on an available unit,” Culkin says.
Any landlord might offer a financial incentive if a renter takes a lease that’s longer – or shorter – than the traditional 12 months, allowing the landlord to synch lease-endings vacancies with peak demand cycles, says Joe Greenblatt, of Sunrise Management, San Diego. A lease start date in mid-month may also provide a discount, adds Culkin.
“Apartment shopping can be an arduous process,” warns Greenblatt. “You have to be disciplined.”
When relocating, study the market online for at least a couple of weeks, before you visit, he suggests. When you’ve found possibilities, visit them and stick to your budget plan. “You might think, ‘Well that is pretty, I’m going to get it,’” Greenblatt says, “[It’s] not in your interest – or the landlord’s – if you don’t make the rent.”
Conversely, if you encounter a discounted space that requires a compromise you know may prove difficult – whether it’s a steep walk-up or a cramped space – it’d be wise to keep looking, concludes Greenblatt.