Renting a property vs. buying wasn’t always such a hot debate that it is today. Owning a home is part of the American Dream, as is being able to buy one if you work hard enough. But times and markets are changing, and it seems that this part of the American Dream isn’t so attainable with only hard work anymore. With so many different factors affecting the market, it becomes harder to predict it reliably — and also harder to get involved in bidding wars.
There are interesting predictions for the California housing market as a whole, according to the California Association of Realtors (C.A.R). The trends they observed and predicted for 2019 point to increased consumer interest in renting vs. buying a new property, among other things. But does this mean it’s a good time to start renting your property instead of looking to sell it? And what does this trend mean for landlords?
One of the underlying reasons why people choose to rent a property instead of buying their own home is fear. Down payments, rising interest rates, high home prices, mortgage payments — all these things can seem overwhelming for someone who isn’t confident they’ll be keeping their good income, or that the market won’t crash and burn. They choose to rent instead, and it seems this trend is rising.
Once we take into account the rising income rates, renting is becoming more affordable, and therefore a more attractive option to many young people looking to have a roof over their head, especially Millennials. Urban Institute reports that single-family rentals now have the fastest development in the housing market, mostly thanks to this age group.
What Makes Renting So Attractive?
People that are now looking to move away from their nuclear families and start their own lives have mostly grown up during the time of an unpredictable market and the housing bubble. Moreover, young adults nowadays are reluctant to get tied down in one place and with long-term obligations like mortgage payments. Finally, they may not be in a stable enough financial situation, especially if they’re paying off student loans or working an entry-level job.
Renting is also attractive for an older age group that is looking to downsize. While they may not share all of the same concerns that young people have, retired Americans who were left with big homes once their children moved out are also growing more interested in renting as opposed to buying.
If You Have a Property to Rent — Consider Doing It
Increased demand for rentals means landlords can command higher rent prices as the competition grows. So, if you have a property you could rent, consider doing that. Even though renting isn’t an instantaneous lucrative deal like selling is and there are inherent risks involved, it can be a good and stable source of income in these market conditions.
No matter what type of real estate market you’re in, it’s critical to work with a professional agent; who has a proven track record of results. If you have a real estate related question, we’re here to help!