When you rent, you get used to little inconveniences. The ferrets next door, the rock band upstairs, the absentee maintenance man and his perpetually full voicemail box: These are all to be expected. One thing you probably haven’t gotten used to over the past couple years? That rapidly rising rent check.
The good news — if you can call it that — is that you’re not alone. According to Rent.com’s recent Property Manager report, 88 percent of property managers nationwide have raised their rents in the past 12 months. Not only that, but 68 percent of those surveyed predict that their rents will rise by an average of 8 percent in the next year. That’s a lot of percents when it comes to the first of the month.
According to Niccole Schreck, senior brand manager at Rent.com, we’re witnessing a classic case of supply and demand. More Americans are renting, and there simply aren’t enough available units to keep up.
“Since the housing bust, there has been a definitive shift toward more Americans opting to rent, rather than buy. The stigmas attached to renting have dropped and many now see renting as the safer, easier, more flexible and at times more affordable option,” she says. “The notion of the ‘American Dream’ of owning a home has less value than it used to.”
While developers are responding to the demand and building new rental properties, these are very rarely affordable options. “Rental construction doesn’t translate to rents going down,” explains Gabby Warshawer, director of research at New York-based CityRealty. “Land costs are high, building costs are high and they’re going to look to recoup that.”
So what’s a renter to do? Schreck recommends shopping smart when it comes time to move. “If possible, look to move in the winter months,” she advises. “While there will likely be even less inventory than the peak summer months, this often results in more flexibility on price from the landlord. They want to make sure they can fill their vacancies as soon as possible, so you have more wiggle room to negotiate here.”
Cities are trending up:
Now more than ever, living in the city comes at a price. “Reduced crime rates are making cities more popular, so more people want to move here, not just visit,” explains Warshawer.
By the numbers:
According to Rent.com’s survey, 45 percent of property managers reported seeing an increase in the number of millennials opting to rent, creating an even greater demand. Student loans and post-recession incomes are contributing factors, says Schreck.
Vacancy rates for rental housing fell to 6.8 percent in the second quarter of 2015, the lowest it has been in nearly 20 years.