Recent analysis seems to suggest that a bad sales market in real estate might mean good news for the rental market.

Since more homes are being foreclosed and the majority of these foreclosed homes are investment properties, tenants are having to pay higher rents to live in the few remaining homes.

Some tenants are finding out too late that the house they are living in has been foreclosed and sold on the courthouse steps.

Rents were driven down towards the beginning of 2006 when the sales market was slowing. Some sellers, instead of seeing this as a reason to lower their asking prices, decided to rent out their homes. With no previous landlording experience, and only expecting to have the mortgage paid, they drove rents down.

Now we are beginning to see this change.

There has been an increasing demand on rental homes, which we can expect to continue in the next few months for the reasons mentioned above as well as the fact that it is harder for borrowers with shaky credit to buy a house.