What is the general consensus on rents throughout the country? They seem historically high. Is there a bubble forming here? What generally causes rents to go up and down? What would cause rents to come down on a macro level?
Rents are based on the going Market Rate just as it is based on the Selling Market Rate of an area or neighborhood.
As a Realtor, I would have clients interested in buying a home for a rental property. I would show them potential homes and tell them how much they could get for rent for that property based on my landlord experience. Normally, $750.00 a month for most of the homes they were looking at.
They would say to me, "Well if I removed that tree, and tore out the carpeting and put all hardwood floors inside the house, and built a nice deck in the backyard, and put in a marble island in the kitchen and different cupboards, how much rent could I get then?" And I would reply, $750.00 a month.
Rents, Selling Prices, are all based on the Neighborhood, type of town, meaning industry, a lot of people moving into the area because of great job opportunities, or moving because a lack of jobs, all affect the rents and selling prices of homes. You could put a million dollar home in an Abraham Lincoln cabin setting and only get the price of an Abraham Lincoln cabin, if you know what I'm saying. The area determines the going rates.
This is why you need to check your Classified ads to where you want to buy a home for a rental and see what the going rent rates are for that area and then you will have a better handle of what to ask for.
General rent rates tend to coincide with real estate sales. If our housing market is tough for whatever reason... high interest rates, high housing prices, lower housing availability, these things will all cause rental rates to increase. When the market shifts to a buyers market, rents will stabilize but rarely go down and if they do go down its very little.
I'm no expert that's just my observation.
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