According to the U.S. Census Bureau, it's more difficult to find a rental in 2015 than it has been at any time since 1993.
That means landlords can be more choosey – and they are. In many cases, rental managers check credit reports and reject those with low scores. They see a poor credit rating as a sign that the prospective tenant doesn't pay their bills on time, and they label them as a greater risk to get behind on the rent, then leave in the middle of the night.
Of course that isn't necessarily true. Thousands of people who always paid their bills on time were hit hard by the recession. When you've lost your income and you have children to feed you're going to do whatever you have to do to take care of them. For many, that meant crushing loads of credit card debt and eventual default on both credit cards and home mortgage payments.
It also means landlords can demand higher rents. Many tenants are finding that when their current lease expires, they can either pay more or move.
Why is it more difficult to find a rental now? Because of the law of supply and demand.
Families that lost their homes turned into renters. The number of renter households increased by 3.4 million in 2007 through 2011. The fact that nearly 3 million of those homes moved from owner-occupied to tenant-occupied might have created balance, but our population is increasing.
The recession caused many builders to halt starts on both single family homes and apartment buildings. Multi-family housing starts didn't begin rising again until 2011 and the supply has simply not caught up with the demand created during those non-building years.
My conclusion: Now is a very good time to own your own home – and to be locked in to a low 30-year interest rate that can't increase even as your income improves. It's also a very good time to invest in residential rental real estate, again with a fixed rate mortgage. As rents rise, your payment will remain the same and your cash flow will increase.
Whether you want a home for yourself or for future tenants, get in touch. I'll be pleased to show you what's available here in Windsor.
If you're renting now, you may be in for a pleasant surprise when you find that you can own a home for less than you're now paying in rent. Talk to your lender today or contact me to get in touch with a qualified mortgage professional.
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