It's amazing to me that my mortgage payment is less than the going rent for my house, according to Zillow. One of the reasons that I'm particularly surprised by the rent estimate is due to the fact my husband and I have a 15-year loan, which means it's a higher payment.
According to a recent article from The Wall Street Journal, in many parts of the country the demand for single-family homes to rent is greater than the supply of rentals. In fact, the article states the rental demand has jumped more than 25 percent in the last year in the places where there are the most foreclosures.
Looking back at the decision to buy
I live in South Florida where the foreclosure crisis hit early and hit hard. Still, I can't help but think my husband and I made the right choice by buying our home when we did even though we purchased it during the height of the housing bubble for about $180,000. According to Zillow, it would cost a home buyer $122,387 to purchase our 1,800-square-foot home. The rent estimate is about $1,300 a month. However, our mortgage payment is $1,200 a month. It's conceivable a person purchasing our home at the going price would be able to obtain a mortgage with a payment as little as $423, according to Zillow. After adding in taxes and insurance, they would probably pay only about $600 a month for a home that is only 7 years old.
Renting from an apartment complex
When I first moved to Florida about 10 years ago, I rented an apartment for almost $800 a month. I recently checked out of curiosity to see what the going rent now is for the same apartment unit. I found they are now leasing them for $900 a month. It doesn't seem that the rent of the apartment units have gone up as much in the past 10 years compared to single-family rentals. In many cases, though, families want to enjoy the lifestyle of being in a home even if they don't own the house.
Holding onto houses when relocating
I've noticed a trend of more of my friends and relatives holding onto the different houses they own, especially in key parts of the country such as Tucson, Arizona. I had one neighbor who had to relocate for his job in New York, but rents out his house here in South Florida. A friend who recently moved to Florida decided to rent out her house in Tucson instead of selling it. Another person I know inherited a house, which she quickly turned into a rental. According to the article, the rental demand has jumped 25 percent in Tucson as well as cities including Riverside, California and Port St. Lucie, Florida. Overall, leasing activity is up 7 percent from last year, but the inventory is down.
Even though rental demand is up, it's hard to understand how anyone can afford such high rents. It's a shame that many families have to patch together a rent check between the income of a father, mother, grown children or extended family members. Landlords, I think, need to be open to multi-generational tenants. At the same time, I hope many landlords are humane enough not to gouge renters desperate for a place to live. Just because the going rent for my house would be $1,300 a month, doesn't mean I'd ever charge that much if I decided to rent it out.
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