Articles

More and more consumers are recognizing that at least for right now they are better of financially renting than buying. This is certainly a departure from the past when most consumers realized that the best financial option would be to buy rather than rent so that their money would go toward creating equity in a home.

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 the result of conflicting motivations, experts are quick to point out that the market is neither a buyer's or a seller's market. Instead, it has become 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 are experiencing a deficit in supply of rental properties, in other areas homeowners have recognized the wisdom of holding off on selling their homes. They, too, are reluctant to sell their homes now when it seems more prudent to wait and see when the market will stabilize. To help make ends meet, many of these homeowners are willing to rent out their homes to the scores of renters lining up to take advantage of the opportunity. Even homes that are on the market for sale are also available for rent. While renters must accept the reality that the home in which they are living must be available for showings, they still feel the trade-off is quite worth it.

Investors who have been trying to flip homes have discovered that it makes more sense to rent out the properties for the short term instead of selling them. In some cases these flippers have no other options, as they can't sell their properties at even their more modest prices. In some cases, this means the investors are taking a loss, with 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.

Get control of your finances and your home. Inform yourself on how to end the worry about who is going to own your home. Foreclosure Help