It’s a struggle in the home buying market these days. Locked in nicely at below 3% mortgage rates, current homeowners have little incentive to sell. A combination of low inventory and rising interest rates have forced many prospective home buyers into the rental market. There is a solid demand for single family residences… and landlords are taking advantage, demanding unprecedented rates. According to a 2022 Real Estate edition of money.com, overall rent prices have climbed 17% over the past year, with some parts of the country affected more than others.
Top 10 Cities where Rent is Rising the Fastest
Miami, Florida: 55.3%
Orlando, Florida: 35.4%
Tampa, Florida: 32.3%
Austin, Texas: 28.1%
San Diego, California: 25.4%
Las Vegas, Nevada: 25.1%
Phoenix, Arizona: 25%
Jacksonville, Florida: 24.9%
San Antonio, Texas: 24.2%
Memphis, Tennessee: 23.4%
The current state of our economy isn’t helping. As the cost of goods and services rises, budget items get realigned. If you followed the old rule, 30% of your gross income went toward rent. Ex/$3000 take home monthly pay pretax= $900 rent. But wait, gas has increased nearly 50% and food prices are averaging a 5%-7% increase. So how much can you really spend on rent if your groceries and gas have skyrocketed?
If you’re looking to rent, make the best of your situation. Be selective. Look for properties with quality features. There is something to be said about not worrying about maintenance issues, utilities, closing costs, taxes, etc. Not having to anticipate home maintenance costs gives you the opportunity to save for when home ownership is financially right for you.
At AKB, we’ve renovated dozens of investment properties. Our experience has shown that installing quality cabinetry, countertops and fixtures saves investors in the long run. Kitchen and bathrooms are the most often used rooms in the house and quality cabinets should retain their function and use for decades.