Trends of home rentals in a down market
I know apartment rent prices are increasing quite a bit. At the same time, I'm seeing a lot of unsold homes that are coming up for rent (at fairly high rents). Does anyone think that the rents of the expensive homes are going to come down anytime soon --- since more such homes are available for rent?
We are looking to rent a larger, newer home on the eastside -- but don't want to pay more than $1800 or so. Most homes that are listed for rent are asking $2200 and above.
Also, what's a good place to look for home rentals?
We are looking to rent a larger, newer home on the eastside -- but don't want to pay more than $1800 or so. Most homes that are listed for rent are asking $2200 and above.
Also, what's a good place to look for home rentals?
Comments
http://seattle.craigslist.org/search/ap ... bedrooms=2
http://seattle.craigslist.org/est/apa/452263604.html
Yes, I think that rents of ALL East Side homes will come down as the real-estate inventories increase and condo sales tank (i.e. pushing many condos back into the rental market).
However, there could well be a lag of 6 months to a year before we start to see rental rates decrease. This is what happened in places like Miami and San Diego. Rental rates were the highest right when the real-estate market was transitioning from boom to bust. Rents were kept in check on the way up by the lack of demand as every renter decided to take sub-prime loans and buy a house. On the way down, rents are kept in check by a ballooning inventory of unsold properties and home-owners willing to do ANYTHING to stop the bleeding.
At the very top of the market, however, fewer renters decide to buy but the pain hasn't become severe enough for home-owners dreaming of cashing out to start renting yet. I believe the Seattle area is precisely in this transition phase right now.
That said, I have been noticing lots of For Rent signs popping up on the East Side as I bicycle around. I am also struck at how long some of these places go without finding tenants. There is a home just two blocks from me that has had a For Lease sign up since May. The owners are asking $1800, which is a bit high for a dated '70s 3 bed 2 bath. I can't imagine why they just didn't drop the rate to $1600 months ago rather than let the place sit empty.
Yes and no, what matters the most is going to be the bottom line. The people renting out these second homes are looking to turn a profit, so they set their rent accordingly. It's very possible that they set it too high however. At which point reality sets in. Every month a home sits empty is an 8% decline in the income that year.
Even people who aren't business savvy will quickly figure out that it's better to drop the monthly price 20% than sit empty for 3 months (assuming the renter doesn't create too much additional costs). This becomes especially true with rentals, because the owner knows what they are paying out each month, and they will realize it's better to get 60% of that back in rental 'income' than take a 100% hit each month.
How long it takes, will vary though. Good luck.
When my brother was looking at a rental for his family in the Fort Lauderdale area in the summer of 2005 he was struck by how many home-owners were desperately trying to rent out their homes, but at unrealistic prices (to cover their mortgages). Now, the rental market in Fort Lauderdale has come crashing down, as the home-owners have gotten so desperate to get SOME money that many of them have significantly lowered the rents. The summer of 2005 was the worst time to get a rental in Fort Lauderdale. In the fall of 2007 it is a screaming bargain.
Home prices defy gravity; rents drop; smart buyers wait; home sales slow; rental market tightens; and rents recover a bit.
Then sale prices drop; stubborn owners can't believe it; and some can hang on waiting for prices to go back up and rent their properties out. Rents drop again.
Lesson:
If you rent: you win
If you wait to buy: you win
True, renting is the better choice these days. That said, even renters can feel a spot of pain as the real-estate market transitions from boom to bust. But that small bit of grief (from rising rents) will be short-lived, and will be FAR less than the disaster home-owners are in for.
Thanks for the link. We are looking for homes that are less than 10 years old.
The last thing you probably want is to move into a great place and find out it's being foreclosed on soon.
let me guess, you're looking for 98004 zip code, 3000sq/ft or higher.
keep waiting...
That requirement does make the pickings much slimmer. There are plenty of 3 bedroom Bellevue homes for less than $1600 advertised on Craigslist, but they are largely of a '70s vintage (although some have been remodelled). There are also some newer town-homes available if that works for you.
One other thing to keep in mind is that the advertised rate is just a starting point. I have negotiated leases with many of my landlords. I didn't talk my current landlord down on price but did get him to fence the yard and throw in a few other improvements for us.
Apart from Bellevue, we are open to Redmond, Sammamish and Issaquah as well.
http://seattle.craigslist.org/est/apa/448220764.html
I wonder what they would consider a "good investment" since I don't think there is any piece of property for sale on the eastside that would get you a net positive cash flow if you rented it out. And if they're banking on rapid appreciation, uh, good luck.
This guy's open to buying any listed property on the eastside and rent it out for you. His asking rent is about $500 for every $100K of the price of the home. He seems to be betting on appreciation, and seems to want the rent to cover most of his montly payment.
It's been a weird couple of years, but if I understand the term correctly: "Good investment" == "Any house not built entirely out of asbestos".
How did you find out about how much they want in rent? $500 for each 100k is too much. I'm renting a 500k house for 1,400 a month and he wants 2,500? Admittedly I'm getting a good deal, but not that good.
I agree. That is too expensive. I'm renting a $350k condo for $1150. My previous rental was a $700k house for $1800.
Isn't that *roughly* the cost of a low rate mortgage?
This house was listed as recently as last week at $1795, and now it is listed at $1695:
http://seattle.craigslist.org/est/apa/470029950.html
The glut of houses for sale could soon translate into a glut of houses for rent. Which would bring the rents down.