U.S. Economy is Changing the Rental Market
More Renters, More Landlords, More Complaints
Certain areas of the country are reporting increased rental market activity, as a result of the struggling U.S. economy. While it is still true that vacancies are up and rents are lower across the U.S., more foreclosures and a decline in lending are turning more former homeowners into renters—and more inexperienced property owners into landlords.
News reports show that even homeowners with good credit are being foreclosed upon; as a result, landlords could start seeing tenant applicants with otherwise excellent credit reports. They might not be accustomed to renting a home, so landlords are advised to communicate terms and conditions of rental agreements clearly.
Homeowners change paint colors, add or remove landscaping, and change out lights and other fixtures as they wish. Renting after homeownership is a different experience, and reminding your tenants about what you expect will go along way in preventing conflict and property damage.
An increasing number of vacation homes are entering the market as rentals. Owners, who purchased the homes for their own use, or to rent for short-term vacation rentals, are finding the economy has changed their plans. Unable to find enough vacationers to pay the mortgage, they typically try to sell their second homes, and then finally turn to renting them. The number of vacation homes available for long-term rentals is skyrocketing, according to a report—and by people who never considered they’d have to rent out the property.
These new landlords are adding to the changing rental property landscape, as are new investment property owners, taking advantage of foreclosure sales. This increase in newbie landlords is leading to a corresponding increase in complaints about fair housing and discrimination.
This year has been a wild ride for landlords, but just like at the amusement park, all rides eventually come to an end.