Travel Zone

As the housing market continues to slump, more and more people are realizing that for the near future, they are better off renting than buying. This is a significant departure from the past few years where consumers were obsessive about owning their own homes and building up their equity.

However, this is no longer the case. In many locations rents continue to rise but people are finding even these elevated rents are cheaper than what they would pay on a monthly mortgage for a similar property. In some areas, renters are seeing savings of 40 to 50 percent by renting than buying.

One of the reasons for this is that in some locations, property values rose quite steeply. Today, buyers who snatched up those homes without blinking have discovered they must now sell. The problem? They need to sell the homes at the prices at which they purchased them two years ago to recoup the balance they owe on the mortgage. Renters just are not willing to pay more money than a home is worth.

Many renters who qualify for mortgages feel they cannot get enough home for their money, especially when they can rent a comparable or larger home for less cash.

As a result of the shifting market, many experts are quick to point out that today the market is no longer a seller’s market and it is not really a buyer’s market either. Instead, it has become more of a renter’s market.

Other renters are holding off on the idea of buying because they are concerned that prices have not yet hit the lowest point. They are primarily concerned that if they purchase a home today it may not be worth the same amount just six months from now. They feel it is far more prudent to wait and see exactly where the housing market will land before they consider buying a home. Other renters are concerned about the upcoming hurricane season. Few have forgotten the hurricane season of just two years ago that devastated many areas. Homeowners in those areas, especially those without insurance, have yet to recover.

While some areas there is a deficit of rental properties, in others homeowners have recognized the prudency of waiting to sell their homes. They are reticent to sell their houses now when it seems wiser to wait and see when the market will stabilize or pick up. In some cases, homeowners are renting out their homes to the scads of renters waiting to take advantage of the opportunity. You even see rental signs on homes for sale. In these cases, renters accept the reality that the home must always be ready and available for showings, they still see the benefit of renting these homes as 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 selling 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.

The situation has become so much of a problem that landlords in some focused markets are having to slash their rents in order generate a small amount of cash flow. These investors are discovering it is far better to rent right away at a loss than to wait several months to find a renter willing to pay the amount they need. Even these upside down landlords are finding that renting them is the safest and least expensive option, at least for now.

Rid yourself of the worry about who is going to own your home. Arm yourself with the knowledge to avoid the foreclosure of your home. Foreclosure Help

- Steven Lohrenz