Did you catch the front page of the paper today? If not, no worries...I gotcha covered:
As thousands of families are losing their homes, property values remain low and construction is at a standstill, one thing has increased in the last year: rentals. And as the economy slowly recovers, the cost to rent has increased.
For the 38 percent of Tulare County residents who rent apartments, condominiums or homes, their rent may soon see a spike, according to local rental managers. And as the number of available rentals dwindles, those looking for a place to rent may find it more difficult.
"We have a wait list for this summer of people hoping to get a unit," said Tony Montelongo, who manages Sierra Ridge apartments in Visalia. "We are at the highest numbers we've been at in seven years."
The Sierra Ridge complex isn't the only set of apartments seeing an influx in renters. Most sites are at or near capacity. The average vacancy was 2 percent in Visalia and Tulare, according to property mangers interviewed Tuesday.
The Oak Valley complex on East Cross Avenue in Tulare has one apartment available out of 109 units. The high numbers for complexes like Oak Valley and Summerfield in northwest Visalia mean higher rent and fewer incentives.
Managers in Visalia and Tulare said rent has increased and will land between $10 and $20 higher a month by the end of July. Property managers say the increase is a direct result of higher demand. Move-in specials and incentives have also become nearly nonexistent, as most managers say they don't need them anymore.
"It's a good thing. We're seeing growth for the first time in a while," said Myra Ramirez, who manages the Oak Valley complex.
Market researcher Reis estimates apartment rents will increase 4.3 percent this year, the biggest jump since 2008.
Other researchers who follow rents nationwide estimate rents will rise at least 5 percent.
But with the increase, the research companies also expect 90,000 fewer apartment units to be built this year and a third fewer homes.
In April 2010, there were 112 apartments and 105 homes advertised for rent in the Times-Delta/Advance-Register. This April, there were 61 apartments and 99 homes.
WHAT THIS MEANS: Now is a great time to purchase investment properties.
WHAT THIS MEANS IF YOU'RE CURRENTLY RENTING: “Why are you renting when you can buy”? The reason I ask, is because record low interest rates + tax benefits of homeownership add up to a bang bang combo! This is an opportunity to pay your own mortgage, vs. paying someone else's mortgage for them. Not to mention, renting is literally "throwing money away", vs. putting your hard earned money toward something you have the opportunity to make money on if you have the need for a place to live for 5-7 years.
Let me break it down for you:
Below are estimated monthly payments for FHA loans, based on corresponding purchase price amounts:
LOAN SPECIFICATIONS: 3.5% Down Payment, 30 Year Term, 4.5% Fixed Interest Rate
$150,000……….$1015 $200,000……….$1354
$160,000……….$1151 $210,000……….$1422
$180,000……….$1219 $220,000……….$1489
$190,000……….$1286 $230,000……….$1557
*Estimated monthly payments are comprised of PITI {Principle, Interest, Taxes, Insurance}
**Mortgage data provided by Jeremy Engle of Kings Mortgage {www.kingsmortgage.com 559.713.1068}
