Consumers Benefit From A Renters Market

By Author: Troy Foote
Total Articles: 9
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There was a time when it made more sense to buy a home as apposed to renting. The idea was to build equity in a home to create financial stability. That was then, this is now. Consumers are realizing that for now they are better off financially to rent instead of buying.

Despite the fact that rents continue to rise due to the housing shortage, consumers are still finding out that it is cheaper to rent than to have to make mortgage payments. In fact, some renters are able to save between 40 to 50% on monthly payments.

When property values where starting to rise, buyers where snatching up homes without batting an eye. Now, two years later, they discover they have to sell at a much-reduced rate just to recoup the balance they own on their mortgages.
Renters are just not willing to pay more money than a home is worth.

Even renters who are able to qualify for mortgages just do not feel as though they are getting enough home for their money, especially when they can often rent a comparable or even larger home for less.

Due to the ever changing market, experts are quick to point out that today ...
... the market is no longer either a buyer` or seller's. Instead it is a renter's market.

For those who can afford to purchase a home, many are holding off because they feel the market has not yet hit the lowest point. Why buy, when six months from now their homes may be worth even less. There are several factors that fuel this concept of renting instead of buying.

One is that the market has shown no indication of turning around anytime soon.
Employment layoffs and job shortages have also contributed to uneasiness. Natural disasters and unrest have also played a part especially if one cannot afford adequate insurance. The last thing that new homeowners want to face is credit problems and possible foreclosures.

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 sell them. In some cases, investors are discovering they simply do not have any other options when they must meet mortgage payments every month and are unable to sell their properties. 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 that landlords in certain niche 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. 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.
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