Rents are on the Rise, Have You Considered a Long-Term Lease?
Rents are predicted to rise for the foreseeable future. Renters need to budget accordingly.
The Great Recession the US is experiencing coupled with the Housing Meltdown, is leading to more and more renters, driving up the cost of rents.
With just a tiny bit of research, renters can verify this. A recent Fortune magazine article, “Winners of the Rental Economy” covered the topic. So did Money magazine with, “Where Rents Are Rising the Most, the Least.”
According to Moody’s Analytics economist Andreas Carbacho-Burgos, rents increased by over 15% during the period 2006 to 2009.
Why are rents rising?
The two biggest reasons are: (1) Most of the millions that lost a home to foreclosure will be renting as they can’t qualify for a mortgage for at least 3 years. (2) An increasing number of young professionals, first-hand witnesses to the recent Housing Meltdown, have decided owning a home isn’t something to rush into, so they’ll rent instead.
What can you do to avoid annual rent increases?
Well, most landlords will sign a 2 or 3 year lease at the same rent as a 1 year lease. If you plan on staying in the home you’re renting, or plan to rent, for more than a year you should consider signing a longer term lease.
Note: Before this period of rising rents, Landlords used to offer a lower rental rate for longer term leases. Now, they have little incentive to do so. Most will only offer to keep the rent the same for a longer term lease.