Sacramento Homeowners Are Renting Instead of Buying a Home
Navigating the waters of choosing to rent out your home or list it for sale can be difficult. There are so many options and what-ifs that present themself with either decision. There are many pros and many cons to each. It comes down to the personal decision of the homeowner determining what is best for them. Property management companies in Sacramento are seeing a large increase in the amount of properties that are listed as rentals in comparison to for sale signs. With mortgage interest rates hovering around five percent at the start of 2019, purchasing a house is becoming increasingly unaffordable. It is not a buyers market. It is a renters market. That is why choosing to list your house for rent can prove to be a very profitable choice in this economy, and here’s why.
Why Is Buying a House Unaffordable?
Many factors play a role in making housing affordable and unaffordable, but recent reports released at the beginning of 2019 are taking a look back at 2018 to see exactly what the market did to land the U.S. in an unaffordable housing market. Last year, unemployment nearly hit a fifty year low while the amount of job openings were high. You would think that with more citizens employed, they would have more money to spend and be purchasing houses. However, mortgage interest rates also increased putting the once affordable house, out of reach for even the well-employed. Property management companies in Sacramento know that these five percent mortgage rates may not seem high to those over the age of 40 who bought a house in the past with rates between ten and fourteen percent. But the increase between four and five percent is making all the difference for millenials.
In 2018, home builders built fewer affordable new single family houses than in past years. Reports show 50,000 affordable single family homes around 1,400 square feet were built in 2018 compared to the typical 200,000 in normal years. Instead, builders have their eyes set on expensive apartment complexes and executive housing. Let’s not forget that the price of building materials, including lumber and gypsum, have also increased over recent years. Builders are also running into stiff zoning restrictions and higher permitting costs in urban areas where the affordable housing shortage is especially tight.
How Homeowners Can Make Money In a Renters Market
Property management companies in Sacramento see houses listed for sale sit on the market for months without selling. All of the above mentioned reasons are to blame for this discouraging situation. Homeowners need not worry about selling their home for less than it is worth just to get it off the market. They have another choice. A choice that can result in big cash flow. Listing a home for rent in a renters market is the smart choice if you do not need the equity out of your home to purchase a new one. HotPads released a recent report showing that in 2018, renters paid a record $504.4 billion in rent compared to 2017’s whopping total of $12.6 billion. Going along with the increased amount Americans spend on rent, Pew Research Center has also found that more households are renting than at any point in the past 50 years. Sacramento property management companies not only saw an increase in the amount of people renting, but also an increase in the rental price from 2017 to 2018. San Francisco takes the cake with the highest monthly average rent price for a one bedroom apartment at $3,535. New York City falls slightly behind that at $2,895. While Sacramento might not at as high at $3,535 per month for a one bedroom, it is still very high at $1,140 per month as of January 2019. That is a 3% increase from 2017. These rent increases allows property owners the opportunity to make money despite not being able to sell their house. They will experience low vacancy rates due to the apprehension of would-be home buyers. A high demand for rentals helps drive up the rental price because of basic supply and demand economics. Not only can property owners expect to find a large pool of quality prospective tenants, but also the potential to make big bucks.
Why Property Owners Need the Top Property Management Company in Sacramento
Renting out your house is no easy task. Many property owners underestimate the time, organization, stress, and overall management duties that a rental home requires. RPM Select is the leader of property management in Sacramento and has a proven track record for over 30 years. Select has lower vacancy rates than its competitors, while continuing to provide quality service and find highly qualified applicants. Select handles everything for property owners including conducting market research to ensure you get top dollar in rent, marketing the house, showing the house, conducting a rigorous tenant screening process, signing lease agreements, handling and scheduling of maintenance, rent collection, property inspections, move-outs, and turnovers. We know you have a choice from many different property management companies. Don’t make the mistake of hiring the wrong property management company. Sacramento is where all your rental investment dreams become reality. Call Select today.
