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Margot Friedlander ABR, e-Pro, SRES

Margot Friedlander

Licensed RE Salesperson
ABR, E-PRO, SRES, SFR

Bedford Mount Kisco Realtor

Email Margot

Address :
30 Village Green
PO Box 582
Bedford NY 10506

Office Website

Office : 914-234-3647 x 221
Cell     : 914-275-3312

 

 

The Guide For Renters
The new real estate boom: Rentals

By Inman News, Brian Davis - Thursday, September 22, 2011.

 

Home prices and sales may be flat, but the rental industry is booming. The percentage of renters is on the rise, the number of households is increasing, and more Americans are downsizing, all of which point in a single direction: rents are on the rise.

At the peak of the housing boom, homeownership in America reached an all-time high at 69.2 percent. Today that number has plummeted to fewer than 67 percent, which may not sound like a huge drop, but that represents roughly 3 million households that were owner-occupied and are now tenant-occupied.

The high foreclosure rate has accelerated the transition toward leasing, but there are a myriad of other trends coalescing to boost demand for rental housing.

For the first time in 40 years, demand has been shifting toward smaller dwellings, coinciding with a shift in demand toward urban centers. Baby boomers are considering downsizing, moving toward areas with more amenities, and members of Generation Y are just hitting their single, urban-living years.

Only the relatively small Generation X is in the buy-a-large-house-in-suburbs category, which means the demand for the traditional single-family home with a white picket fence is weak.

It's estimated that 1.2 million young adults moved back with their parents from 2005-10, which does not include the number of adults who moved in with roommates or those who would have moved out of their parents' houses but didn't because the economy was so bad.

Now, however, these artificially joined households are separating, the vast majority starting with a lease agreement.

Rental vacancy rates are sharply on the decline as well. In the first quarter of 2011, rental vacancy rates had dropped to 6.2 percent, according to Reis Inc., which tracks nationwide residency data. This figure is down sharply from the 8 percent vacancy rate just one year earlier.

That, of course, means that rents are on the rise. The nationwide average rental amount rose from $967 in early 2010 to $991 in 2011.

The bottom line is that the rental industry is on the rise, and some real estate experts believe that its growth will accelerate rapidly over the next three to five years.


 

Rent versus Buy

 
It’s better to buy a home than to rent one in most cases.  But not in every case. Comparing buying to renting is actually a fairly complicated endeavor. However, there are a few easy guidelines you can use to aid you in your decision.  Buying a home is usually more beneficial than renting except when:

  • You intend to move within a few years
  • Your rent is very low
  • You don't expect to live more than another 15 years

Building equity vs. “throwing your money away”

Although it’s often said that by owning a home, you’re not “throwing your money away on rent.” This may be true, but when you buy a home you will still throw money away on things that don't build any equity. These include:

  • Closing costs
  • Interest on your mortgage
  • Property taxes
  • Property Insurance
  • Private Mortgage Insurance (if your down payment is less than 20%)
  • Maintenance

In fact, these “throwaway” expenses are more than you’d likely spend on rent.  If the only financial advantage to buying a home were building equity, it wouldn’t be enough to offset these expenses, and it would be better to rent. The reason that buying is usually better than renting is not because you avoid throwing money away, it's because:

  • You lock in your monthly payment for 15 or 30 years. (If you kept renting you’d pay more each year.)
  • Your house gets more valuable over time.

Freezing your monthly payments is where the real benefit is.  Were it not for this, for many people it would make more sense to rent. This is the gem that makes home buying worthwhile. There are a couple of other advantages to buying:

You can stop making payments when the loan is paid off. This is a big advantage, but it doesn't get your costs down to zero. You will still pay for taxes, insurance, and maintenance even after your loan is paid off. On a home worth $180,000 that could be around $525/mo. Sure, that's better than the $1000/mo. you could be spending on rent, but it's not free.
You can deduct mortgage interest on your income taxes.

For most people this advantage is pretty small, but you can certainly calculate it in your own analysis if you want to be complete.

Easy Rental Home Decorating

It's hard to get worked up about decorating an apartment that you don't own – but it's equally as difficult to live in surroundings that don't reflect your style. "A lot of people make the mistake of thinking, 'I'm renting, so I'm not going to do anything to this space, because I'm eventually going to move.' And then they end up staying two, four, five years. Even if you stay somewhere two years, when you get home at the end of the day, if that place is to your liking, it makes such a difference in your psyche."

So what do you do if you yearn for a personal touch but have to contend with a limited budget or landlord restrictions? Plenty.

A multihued rug brings color to a room when you can’t paint your walls.
Dealing with institutional trappings
Perhaps the best thing about most apartments today is that the slate is blank – and usually neutral. Virtually anything you lay on top of this canvas will work.

"If you can't paint your walls or if you have an ugly rug, you can put color into your furnishings with a big, colorful rug or throw pillows or even accent lamps with colored or textured shades,"

Be sure to use a pad between your area rug and the apartment carpeting so the rug won't slide and the carpet won't suffer from color transfer.
 

While most apartments already have mini blinds on the windows, some landlords allow you to add curtains as well. Simple side panels on a decorative rod can make a dramatic difference in a room by adding a jolt of color and personality. Weave your color choices throughout the apartment with pillows, throws or accessories. A white kitchen can come alive with a colorful teapot on the stove, some attractive dish towels and zesty countertop accessories, such as flour canisters and oversize salt shakers.

 Lean artwork against your mantel or walls to prevent nail holes

If you can't make nail holes in walls, a large, framed mirrors you can lean against the wall will add far more personality than one attached to the inside of a bathroom door. Lean smaller pictures against a wall atop fireplace mantels, chest-height armoires orbookcases. Pier 1 Imports offers a handsome wooden easel you can set up in a corner or behind an angled sofa to display framed artwork. Consider making changes that you can easily reverse.

Put new knobs on kitchen cabinets and new lighting fixtures in the bathroom and foyer. You then put the landlord's knobs and lights in storage, and will switch them back before moving.

 

If you simply must have color on the walls, try creating simple rectangular frames with 1-x-2s from the lumberyard and attaching swaths of fabric with a staple gun. Lean three or five of these against the wall with a bit of space in between. Your fabric can be a solid, print or texture. When you move, Ward advises, use hinges to turn the panels into a folding screen, or remove the fabric and use to make pillows or other decorative touches.

   Small spaces require creativity. This gate leg table in the entryway...

Coping with small spaces
Choosing multifunctional furniture helps apartment dwellers utilize tight spaces with elegance. A dining table may do double-duty as a home office desk. Or a computer armoire – with doors that hide your office away when not in use – may have enough extra room to store books or blankets.

If you don't have enough room for a dining table surrounded by chairs, try creating a banquette-type setting, with a bench against the wall, the table in front, and chairs on the open side. If the bench has storage beneath the seat, all the better.

...turns into a dining table when company comes over.
Other multipurpose pieces could include a sturdy ottoman that doubles as a cocktail table or a futon chair or sofa that pulls out into a bed for overnight guests. Storage must be creative. Put a skirt around a bathroom sink to hide necessities, and even use two tension-mount shower rods – the interior one is for the waterproof liner and doubles as a towel rod after your morning shower; the exterior one holds an attractive non-waterproof shower curtain (you can easily fashion one out of nice fabric) and hides the drying towels from view. 

Let a folding floor screen fill up the blank space of a corner – and stash anything you like behind it. Use attractive trunks as coffee tables or end tables and hiding blankets or magazines inside. A sofa table or console provides height for displaying accessories or pictures and leaves plenty of empty space beneath for stacks of beautiful wooden or rattan boxes or suitcases, which also can be filled with a host of belongings.

By Diane Benson Harrington

 
 
 

 

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