As new households form, rentals in San Antonio become more popular.
If you’re like 65% of homeowners the firm Redfin surveyed recently, you think house prices will rise over the next 12 months.
Then take a look at Fannie Mae. Their survey states that 68% of homeowners think housing prices won’t rise. What do you think? Will housing prices rise or fall next year?
Which ever way you speculate, the rental market is also very interesting right now. Here are the facts about rental vacancies; not the prices, just the availability. Once you see these stats, a natural conclusion will be clear.
By current estimates, about 1/3 of the population in the USA rent their homes or apartments. In fact rental vacancy rates are the lowest they’ve been in a long time. According to Ycharts the national average is at 8.6%. Vacancies in rentals in San Antonio are slightly higher at 9.2 (That’s 36th lowest among US Metropolitan cities, as of September of 2012.)
Besides the national epidemic of fewer people being unable to qualify for a mortgage, as well as the high rate of foreclosures in the last few years, there are other reasons people choose to rent in San Antonio. Our city’s unique housing environment also has an effect on rental vacancy rates.
First, we have military families who are often only in one place for a maximum of three years at a time. Many of these active military simply don’t want to invest in house when they’ll be moving again soon.
Consider, too, the relocations of families and individuals from other parts of the country for new jobs. San Antonio’s robust job market means an influx of newcomers to the city. The past few years of recession have allowed companies to attract employees from out of town without paying for a relocation. Inevitably, the new job/move means the employee will be renting for awhile.
Finally, take into account the fact that millennials, this generation that came of age in a recession, are very hesitant to buy or own anything they can otherwise rent, from property to cars and even formalwear. It’s a trend that contributes to the boom in rentals.
To recap: the top five reasons for the hot rental market are:
- Tough mortgage lending qualifications
- Too many foreclosures
- Big military town
- New jobs galore
- New family/young millennial trends
Regardless of the exact location of the house, new young families need a place to live. National estimates show there will be between 1.2 and 1.25 million new households in 2013. That means tighter competition for rentals in not only popular rental areas of town, but other areas, too…maybe yours?
Do you think you have what it takes to be a landlord? If so, now is a decent time to try. The competitive rental atmosphere could result in an attractive rental price for your property. Imagine being able to offset the cost and the headaches of being a landlord with a rental income that allowed you to continue to own your home. If you have the ability to relocate or downsize right now, it couldn’t hurt to crunch the numbers and see if you’d come out ahead.
However, if you’re just scraping by making your house payments, or if you are already late on house payments and/or facing foreclosure, renting your house to tenants might be more trouble than it’s worth. Some real estate investing experts even say you can’t get ahead in the land lording business unless you own multiple units or properties. But I know first hand that “getting ahead” is relative. For some, getting ahead means getting a handle on the house payments from month to month. Getting ahead could mean checking out the rentals in San Antonio for your next place to live.
Whatever “getting ahead” means to you, I can help you navigate the unseen forces at work on your quest for financial peace and freedom.
Give me a call. If you’d like a professional opinion on rent prices or advice on land lording, Christine and I are happy to help.
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Photo Credit Flickr CC: Daniel X. O’Neil