Rent prices are rising around the country as many property owners seek to take advantage of unusually low vacancy rates. Landlords in many urban areas stand to gain from the market conditions, which some experts say could be due to many people who previously owned homes returning to renting after a foreclosure or short sale.
While the high foreclosure rates have been painful for many homeowners in Michigan and around the country, the conditions in the real estate market now could mean positive growth for investors and an opportunity to fill previously vacant homes and apartments.
Economists say that landlords are simply responding to market forces that allow them to charge slightly more. “Vacancy has not been this low since the wake of the dot‐com boom more than a decade ago,” according to a spokesperson for a commercial real estate tracking firm.
Low vacancy rates have created markets favorable for landlords all over the country, with the average rent rising 1.3 percent nationwide. Some markets experienced much higher hikes, up to 1.7 percent on average.
Many landlords are happy with the improvement in the rental market since increasing rents can mean profits on properties that have lost money in the past due to overvaluing. However, many renters are unhappy with the change in tide. One renter experiencing a double digit increase told reporters he was looking for a new place because he “resolved not to pay it just on principle.”
Property owners who are interested in renting out their home may want to contact a real estate attorney to find out more about the process.
Source: ABC News, “Apartment Rents Rise, Vacancies Plunge,” Lyneka Little, July 6, 2012.