This year Renters should expect to experience price increases of about 3%, while landlords reap the benefits receiving a further profit increase of almost 6%. According to U.S. Census Bureau, more families are presently renting homes than they are owning them.
“As it becomes more difficult to buy (harder to get a mortgage, for example) more people enter the rental market. Therefore rental prices increase. It is a good time to be a landlord, so more investors see opportunity in the market.” Says Bushari Group‘s Associate Broker Mara Bushari. The supply for these rentals however is experiencing a decline as the demand continues to rise, which is yet another reason for this inflation, and why the rent could continue to climb even further still.
If you’re a landlord or multifamily investor, you’re probably grinning ear to ear dreaming about being in a music video where you roll around in dollar bills while using some form of the popular expression “make it rain” to express your fiscal enthusiasm. If you’re a renter, especially with a family, this may force you to bring up the topic of relocation. Sadly for renters, there is no evidence that these prices will trend in your favor.
I’m gonna take a moment and play devil’s advocate. As a renter, you can’t build your equity and you don’t have as much say in your standard of living. That doesn’t have to mean however, that you’re not still capable of living the American dream. It just means that the American dream has evolved slightly, so renters are just prepared in a new way. If you think about it, based on the past economic downturn and slew of housing foreclosures, people are reevaluating their options.
Owning a home once meant stability and peace of mind, but if the bank owns you, how much security do you really have? As a renter you are free from the burdens of mortgages, which means less debt up front. Let’s not forget that should you decide you don’t like where you’re living, you’re free to move about more easily than you would if you owned your home. Part of the allure to renting could even be argued that American’s thrive on having more than one option for practically everything from cell phone plans to food, to nuptials.
On the other hand if you ARE looking to buy a home in Boston and you want to live comfortably or perhaps luxuriously for an extended period of time in one location, there is good news! The number one reason to buy right now is the extremely low interest rates. If you are presently paying dearly for your Boston rent, maybe it’s time to give some serious consideration to buying. It is a good time to buy because prices still have not dramatically increased from their lows over the past few years, because there are less able buyers out there, and because some great new properties are coming on the market.