There’s no doubt about it: Housing is outrageously expensive. It is tough to buy a home in today’s market, especially anywhere there are readily available jobs. In fact, there are some astounding statistics about housing in the year since Trump took office as president.
- Tax deductions for homeownership were cut with Trump’s tax plan, decreasing the incentive for buyers to buy.
- Home prices nationwide have risen 6.9 percent from April 2017 to April 2018 according to CNBC.
- Around 52 percent of the largest housing markets in the country are considered overvalued, which means prices are at least 10 percent higher than what is considered to be sustainable long term in that market.
- There is high demand and a low supply of existing homes in many areas.
- New home construction has been hit hard by immigration policies. Workers who are worried about families being deported or even are at risk themselves are working cash jobs rather than for legitimate builders and employers.
The market has clearly not gone as expected since Trump took office. Renting in suburban areas is increasingly difficult, and poverty in those areas continues to grow. Sellers can be greedy and picky about buyers. Renters are finding fewer places available, and rental prices are more expensive than ever. So what is a renter to do to look out for their own interests in a homeowner’s market?
Individual Landlords vs. Property Management Companies
There is a trend for homeowners to subcontract the responsibility for finding renters and managing their property to large property management companies. These companies are often stricter when it comes to credit checks and other screening criteria than individuals are. This may seem like a good thing, but for low-income individuals this can often be an additional challenge to renting.
Many apartment complexes and large housing developments are handled by these companies as well, and they are often guilty of unequal treatment of residents and poor management practices. Maintenance is often minimal, and residents who report issues receive lease violations and are forced to move unless they ignore issues.
When possible, renters should seek to rent from individuals or smaller companies. They should ask a lot of questions about management practices and maintenance policies before they move in.
The Length of Your Lease
Studies show that renters often like where they live — just not what they are paying for rent. If possible, they would stay put for long periods of time. What pushes them out? Increasing rental costs every time they renew their lease.
A seemingly simple answer? Sign a lease for a longer period of time. This often requires a bit of negotiation, though. Landlords and property managers like the option to raise rents annually as the market sees fit, and often these increases can be substantial. They outweigh the potential costs of finding new renters, especially in tight markets where open rentals are hard to find.
As a renter, while this may be tough to do, renting for longer and waiting for the housing market to settle may be the best policy for you in the long term, so negotiating a longer lease is even more desirable.
Protect Yourself and Your Property
There is another problem with renting: It is vital that you have a strategy for protecting yourself and your property as a tenant. This means everything from insisting the locks on your doors be changed, locking your vehicle, and ensuring that all provided storage areas are secure.
While renter’s insurance is often required, it is important to make sure you have the proper limits and deductibles in place to cover all of your valuables. Be sure to also note what events and disasters your policy covers. Often property management companies will offer you their own insurance: don’t take it. Research and purchase your own policy that is designed to protect your interests, not theirs.
Saving Money on Utilities
Tariffs on imports and the rollback of incentives to produce green energy mean that the cost of energy is going to go up rather than down. It is harder as a renter to remedy this situation, as you don’t want to spend thousands on solar panels for a home you don’t own, but you can work to save energy even when renting.
- Switch to LED light bulbs.
- Change filters regularly.
- Close curtains during the day to hold in heat or air conditioning and avoid sun heating of your home.
- Run major appliances like the dishwasher or washer at night.
- Use a programmable thermostat to control temps when you are away.
- Turn off the AC.
- Turn off lights and other energy-sucking devices when you are not using them.
Just because you are renting does not mean that you can’t reduce your own energy costs. Not only will it help protect your budget, but it can help you save money toward a new home.
Since the election of 45, it may seem like moving to Canada is a better option thanks to their amazing quality of life, but for many, that is neither possible or practical. Renting is tough, but looking out for your own interests simply takes awareness and a little homework — something we may all be doing more of until the housing market turns around. It looks like that may still be at least a couple of years and another election away.