Today that is no longer the case due to the astronomical loss of equity in real estate properties (both owner-occupied and investment), rents have continued to rise in many areas across the country; But even in these occurrences consumers are still finding they are often able to rent for less money than what they would pay for a monthly mortgage payment, house maintenance and repairs, rising utility costs (especially home heating fuels) and the other home ownership expenses on a comparable property. Not to speak of uncertainty in the real estate market that threatens anticipated equity. In some cases, renters are able to save between 40% and 50% by renting instead of buying in today's market.
One of the reasons for this is the rapidity of which property values rose a few years ago. Today, buyers who snatched up those homes without blinking have discovered they must now sell. The problem? They need to sell the homes at the prices at which they purchased them two to three years ago to recoup the balance they owe on the mortgage and are faced with mortgage balances that are higher than the value or price that they could reasonable sell for. This condition has taken on a new definition known as "underwater" and for many of today's homeowners there is no way out, so renters (would-be buyers) are just not willing to risk the extra money it takes to be a homeowner in an uncertain market.
Even renters who are able to qualify for mortgages just do not feel as though they are getting enough assurances from market economist and other professionals and experts to risk their hard-earned money on a home purchase in today's market and would-be home purchasers who are uncertain about their jobs find themselves in an even greater dilemma where housing options are concerned. Of course they have to live somewhere, so the easy decision where monthly housing expenditures are concerned is to rent. As a result of the shifting market, many experts are quick to point out that today the market is no longer a seller’s market and it is not really a buyer’s market either. Instead, it has become more of a renter’s market.
Other renters are holding off on the idea of buying because they are concerned that prices have not yet hit the lowest point. They are primarily concerned that if they purchase a home today it may not be worth the same amount just six months from now. They feel it is far more prudent to wait and see exactly where the housing market will land before they consider buying a home. Other renters in some specific areas are concerned about hurricane seasons. Few have forgotten the hurricane season of just a few years ago that devastated many areas. Homeowners in those areas, especially those without insurance, have yet to recover.
While some areas are experiencing a deficit in supply of rental properties, in other areas homeowners have recognized the wisdom of holding off on selling their homes. They, too are reluctant to sell their homes now when it seems more prudent to wait and see when the market will stabilize. To help make ends meet, many of these homeowners are willing to rent out their homes to the scores of renters lining up to take advantage of the opportunity. Even homes that are on the market for sale are also available for rent. While renters must accept the reality that the home in which they are living must be available for showings, they still feel the trade-off is quite worth it.
Would-be investors who attempted to get in on the quick profit potential of flipping homes have also discovered that it makes more sense to rent out their properties right now instead of trying to selling them. In some cases, investors are discovering they simply do not have any other options when they must meet mortgage payments and other home ownership expenses every month and are unable to sell their properties at a reasonable profit. In some cases, this means renting the properties at a loss, creating a negative cash flow.
In fact, this situation has become so much of a problem thatlandlords in certain markets are finding they must cut rents in order to create even a small amount of cash flow. These investors have quickly discovered that it is far better to rent right away at a loss than wait several months to try and attain the amount of rent they really need in order to break even or make a small profit. Although landlords are often upside down on most of these properties, renting them out has proven to be the safest method; At least for now.