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Rentals are Hot in Today’s Real Estate Market

It’s doom and gloom everywhere for the real estate market these days it seems, but there is one bright and shining spot: rentals. The rental market is continuing to show signs of vast improvement. Major cities like Houston, Texas are even seeing the highest occupancy rates they’ve seen in years (and cutting commissions for apartment locator services since they’re not needed as much these days). So what’s the deal with the rental market today?

Well, financing can be hard to come by, even though mortgages are at historic lows. Longer and more in-depth qualification processes might keep able buyers out of homeownership but they’ll qualify for a rental in a heartbeat. Unemployment rates can also displace otherwise qualified buyers from ownership as gaps in employment and income don’t look favorable on mortgage applications. However, there are a few options for both the landlord and potential buyer to consider in the current rental-rich market.

For would-be buyers: Talk to your realtor about lease options. These are rent-to-own plans that let you place a deposit on a home you want to buy (which is called the option fee). You then rent the home from the owner for a predetermined time frame, with a certain amount of your payment each month being credited towards a downpayment. If you fail to complete a purchase during the time period allowed, you do lose your option fee. However, if you complete the purchase, the option fee and additional amount determined from your rent each month are credited toward your downpayment. They’re not readily available, but your Realtor will know where to look!

For landlords: If you’re shopping for income property, now might be the time. Work with your Realtor to identify areas prime for gentrification with steady rental rates and occupancy rates. Don’t forget to factor in fees for a property management company – as it’s unlikely you want to be a full-time landlord!

Check out our local events calendar the next time you head out and about and we’ll be happy to say hello when we see you around town!

The Staff at San Juan Realty, Inc.

SJR Website February 17 2011

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