Is it easier to buy than to rent? Maybe. I know that some people who would not qualify for a mortgage have no choice except to rent. Recently I was surprised to discover that some people who could qualify to buy a home were having difficulty renting. The reason is simple. Vacancy rates in the Denver metro are approaching record lows, and some landlords are setting very high standards for renters.
A real estate agent I know told me about renting a single family home in South Jefferson County last week. Nice home, fairly priced, but nothing exceptional about it. She was inundated with qualified applicants. One of the first prospective renters was a couple who had a medical bankruptcy that was discharged over five years ago. They had re-established their credit, had excellent references from previous landlords, good job history, and cash in the bank. The owner of the property decided that in this landlord’s market he wanted perfection. Based upon what I was told, the couple would qualify for a FHA mortgage.
The owner of a prominent property management firm mentioned last week that his firm was receiving three hundred to six hundred calls a day. Vacancy rates are tightening up for a variety of reasons. New construction has slowed dramatically, people are moving into the Denver Metro area, and we all know about the foreclosure mess. What people do not consider is that when a house is foreclosed on, the former occupants need a place to live right now. A foreclosed property may sit vacant for months or years before it is back on the market for either owner occupants or renters. Both renters and landlords are reporting double digit increases in rent. Down the road, I see landlords selling their properties when the market turns around. This will only tighten the rental market further.
If you going to be in a property for less than three years, you are probably better off renting. Longer than that, you should consider buying now. Landlords are not known for their generosity. When prices go back up the fact that you were a wonderful tenant will not matter when compared to how much the landlord can raise the rent or cash out by selling.
Let me know if you need a referral for a good: contractor or tradesmen, attorney, accountant, property manager, etc. I have been blessed to know a lot of great people who do quality work for a fair price. I sometimes know who to avoid, like the glass company that improperly installed a shower enclosure at one of my properties. They forgot to install an expansion channel and then told me how tempered glass implodes all the time. They graciously offered to fix the problem for $725. A reputable company replaced the enclosure for $417. We live and learn, and give a dog only one bite.
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