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Entries in Rent (7)

Monday
Mar112013

Only a Third of Renters Have Insurance, Survey Shows

iStockphoto/Thinkstock(NEW YORK) -- Most responsible people wouldn't think of driving a car without car insurance, but many of those same people rent a home without renter's insurance.

A new survey commissioned by InsuranceQuotes.com found that only 34 percent of American renters have renter's insurance.

The average renter's policy costs just $185 a year, according to the National Association of Insurance Commissioners.  So why don't more people get renter's insurance?

The InsuranceQuotes.com survey found that 60 percent believed renter's insurance must cost $250 a year or more and 21 percent guessed it would cost a painful $1,000 or more.

"Renter's insurance is a lot more affordable than most people think," said Laura Adams, senior insurance analyst for InsuranceQuotes.com.  "Most renters don't realize that their landlord's insurance usually only covers the structure and not the renter's belongings."

For $15 a month or so, renters can be protected from theft, fire, water damage and more.  Many renters' policies even include replacement housing if you have to live somewhere else while your place is fixed.

As with homeowner's insurance policies, flood and earthquake coverage are not included.  And you'll have to pay extra to insure valuables like pricy jewelry and expensive electronics.

Copyright 2013 ABC News Radio

Thursday
Aug022012

To Buy or to Rent? New Analysis Says Buy in Much of US

Stockbyte/Thinkstock(NEW YORK) -- Is it better to buy a home or rent?  An analysis released on Thursday by real estate information provider Zillow.com finds that in most of the U.S., buying becomes a better deal than renting after only three years of residence.

In many metro areas, the advantage comes much sooner. In Miami, Fort Lauderdale, and Tampa, for example, owning beats renting after 1.6 years, the study finds. 

Zillow determined the breakeven horizon -- the point at which owning becomes more financially advantageous than renting the same home -- for more than 200 metro areas and 7,500 cities around the U.S.

Unlike a simple purchase price-to-rent ratio, the breakeven horizon takes into account such other data as taxes, tax deductions, down payments, utilities, appreciation, maintenance, opportunity costs and fluctuations in the rental market.

"People traditionally have looked at the price-to-rent ratio," Zillow senior economist Svenja Gudell told ABC News.  "But that's not comparing apples and apples.  Our calculation takes into account all costs, plus tax deductions and inflation.  It would be very hard for the average consumer to crunch these numbers."

The shortest breakeven horizons occur in markets such as Florida's, where home values fell farthest during the recession.  The ownership advantage there kicks in after less than two years. In other markets, however, where values have held, the advantage comes far later.  In San Jose, Calif., for example, the time is a little over eight years. San Jose had the longest breakeven horizon of any of the 30 largest metro areas Zillow studied.

Within metros, the study found big variations between one city and the next.  In the San Francisco Bay Area, for example, a homeowner breaks even after 8.8 years; while in a similarly-priced home in Menlo Park, the time required is a bit over 14 years.

Metros with the longest horizons (besides San Jose) include Oak Harbor, Wash., and Santa Cruz, Calif.  Those with the shortest include Memphis, Tenn., and Fernley, Nev.

Gudell said it would be a mistake to conclude that buying always is the better option.  Everything depends, she said, on the metro area and the length of stay.  For lots of folks who occupy their home a year and a half, renting remains, she said, "a solid option."  In the right metro, it even can pay off for persons staying as long as five or six years.

Here are the 30 metro areas Zillow examined and their breakeven horizons (in years):

  • Miami-Fort-Lauderdale, Tampa -- 1.6
  • Detroit -- 1.7
  • Phoenix -- 1.7
  • Orlando, Fla. -- 1.7
  • Las Vegas -- 1.7
  • Riverside, Calif. -- 2.0
  • Dallas-Ft. Worth -- 2.1
  • Pittsburgh -- 2.1
  • Cincinnati -- 2.1
  • Cleveland -- 2.4
  • Columbus, Ohio -- 2.4
  • Atlanta -- 2.5
  • St. Louis -- 2.5
  • Denver -- 2.5
  • Minneapolis-St. Paul -- 2.7
  • Charlotte, N.C. -- 2.7
  • Chicago -- 2.8
  • Baltimore -- 2.8
  • Philadelphia -- 3.0
  • Sacramento, Calif. -- 3.1
  • Washington -- 3.5
  • Portland, Ore. -- 3.5
  • San Diego -- 3.6
  • Seattle -- 4.0
  • Los Angeles -- 4.3
  • Boston -- 4.3
  • New York -- 5.1
  • San Francisco -- 5.9
  • San Jose, Calif. -- 8.3

Copyright 2012 ABC News Radio

Friday
Jul062012

Apartment Rents Rising; Vacancies at 10-Year Low

Hemera Technologies/Thinkstock(NEW YORK) -- Across the country, rental prices have begun to spike as vacancy rates reach a low not seen in a decade, according to Reis, which tracks commercial real estate performance.

Nationwide, vacancy rates have fallen below 5 percent to 4.7 percent in the second quarter of 2012 -- a low that hasn’t been seen since 2001.

“For most markets, once vacancies tighten below 5 percent, effective rents tend to spike as landlords perceive that tight market conditions afford them greater pricing power over tenants.  With overall vacancy below this level, it appears that rents are beginning to accelerate,” according to Reis senior economist Ryan Severino.

In the U.S., the average price for effective rent rose by 1.3 percent to $1,041.  New York City had the highest increase in the second quarter after average rents rose 1.7 percent to $2,935.

After New York, apartment renters in Fort Lauderdale, Fla., Seattle, San Francisco and Nashville, Tenn., saw the highest effective rent growth.

New York’s second quarter vacancy rate of 2.2 percent makes it one of the tightest markets for finding a rental apartment.  A few other areas experiencing low vacancies include Portland, Ore.; Minneapolis; New Haven, Conn.; and San Jose, Calif., which round out the top five.

According to Severino, “Vacancy has not been this low since the wake of the dot com boom more than a decade ago and there is a paucity of available units.”

He continued, “As the market tightens and vacancy reaches very low levels, landlords shift their strategy for growing revenue vacancy decline to accelerating rent increases,” which is what is currently happening.

The reasons for higher rents include an exodus of people from houses and condos that were foreclosed during the real estate meltdown and tighter lending standards that have locked more buyers out of the market.

Copyright 2012 ABC News Radio

Monday
Jul022012

Pennsylvania Company Tells Condo Owners: Pay Rent or Leave

Hemera Technologies/Thinkstock(READING, Pa.) -- Condominium owners assume they will be able to settle down in their homes if they stay on top of monthly payments, follow homeowner association rules and maintain the property.  But 11 condo owners in Reading, Pa., had a rude awakening when a developer purchased the property and turned the building complex into rented apartments.

Three years ago, Teresa Fusco, 56, bought a condo unit, appraised for $101,000, at Deer Path Woods in Reading, about 60 miles northwest of Philadelphia.  Eleven units were owned and occupied while the other 97 apartments were rental units.

Fusco, a secretary who lives alone, had about $71,000 left on her mortgage when the property owner went into foreclosure last fall.

A developer, Kevin Timochenko, purchased the rental units for $7,200 at a foreclosure auction, as reported by AOL.  That gave Timochenko almost 90 percent of voting power for the condominium homeowners' association.

Because Pennsylvania law allows homeowners who have 80 percent of voting power to control the sale of the entire property, Timochenko could legally convert the entire complex -- including the condos -- into apartment units for rent.

Fusco said she and the other 10 condo owners were given a choice during a condo association meeting on Dec. 22: pay rent for the property they had previously owned in addition to their mortgage payments, or move out.

"I was devastated because this was my home, not just my house," Fusco said.  "It was where I was going to retire.  If something happened to me, I could still afford my mortgage and my taxes.  I was just completely taken aback."

Timochenko did not return a request for comment.  Nicole Plank, an attorney for Timochenko's Metropolitan Management Group, did not return a request for comment either.

To add insult to injury, property values in Reading have taken a hit as in many other parts of the country, and Timochenko had the entire property appraised at a value that was less than fair market value, said Fusco and Fred Nice, her attorney.

The average appraised value was around $35,000 for each unit, whereas owners like Fusco had mortgages of around $60,000 to $90,000, said Tom Beaver, an attorney working with other former condo owners.

Pennsylvania state senator Judith L. Schwank, whose district includes the town of Reading, introduced a bill on Thursday that would allow a voting block of 75 percent of actual condo homeowners -- 11 total in Fusco's case -- to reject an appraisal.  Unfortunately, she said, the bill, if passed, could not be retroactively applied to Fusco's situation.

Copyright 2012 ABC News Radio

Wednesday
Jun222011

Rent-To-Own Deals May Turn Out to Be Very Costly

Keith Brofsky/Photodisc/Thinkstock(YONKERS, N.Y.) -- Many consumers who don't have enough cash to buy household furnishings or expensive electronic devices turn to stores like Rent-a-Center and Aaron's, where they can rent the furniture and entertainment systems they want.

In time, renters can opt to buy the pieces they were loaned by continuing to make scheduled payments.  But, as Consumer Reports warns, that might not be a smart option.

"We found that you could easily pay what's effectively a 100 to a 300 percent interest rate," Mandy Walker of Consumer Reports says.

Take a $600 laptop, for instance.  At a rent-to-own store, shoppers can have the device for just $39 dollars a week.  After about a year, they'd be able to own it but they would've spent $1,900 to make the laptop theirs.

"You could've bought three computers for that," Walker says.

She says using a high interest rate credit card "would still be a better deal than most of these rent-to-own deals."

Copyright 2011 ABC News Radio

Tuesday
May312011

Rent or Buy? Six Tips to Help You Make the Right Decision

Stockbyte/Thinkstock(NEW YORK) -- Stan Humphries, chief economist at Zillow, and Celia Chen, senior director at Moody's Analytics, spoke with ABC News about what potential homeowners need to consider before deciding whether to buy or rent. Here are their tips:

1. Time

On average, if you are planning on living in a home for five years or more, you should consider buying. If not, renting is usually the best option.

Chen: "The first question you want to think about is how long you're going to live in a place. When you purchase a home there are a lot of transaction costs related to the home purchase, and these are sunk costs that will be difficult to make back."

2. Income Stability

If you do not have a sustained and stable income, you should look to rent because it is easier to change your living situation depending on how much money you are earning.

3. Percent of Income

You don't want to spend more than a third of your income on all housing-related expenses. That includes mortgage payments, property taxes, insurance and any other housing-related costs.

4. Price-to-Rent Ratio

The price-to-rent ratio is the real estate price divided by the annual rent. If a house has a price-to-rent ratio of 15, that means the price of the house is 15 times the annual rent that home would earn. The New York Times has an easy-to-use calculator that will help you crunch the numbers.

Humphries: "The higher that ratio is, the more renting is going to become favorable. Typically, the break point there is something in the 15 to 20 range. So if that ratio is 15 to 20, meaning that buying a home is 15 to 20 times more expensive than the annual rent, you would spend on the same house. Then that's a range in which renting is more advantageous....The higher that ratio is the less attractive buying looks, and the more attractive renting looks."

5. Quality and Inventory

The rental and for sale markets vary in the quality and inventory they offer. It is important to compare the markets and see where you are able to find the place that fits you the best. In a normal market, it is usually easier to find what you are a looking for in the for sale market. However, with the increased number of people looking to rent, many investors are converting single family homes that were once for sale into rentals. The quality and inventory vary greatly by the market you are looking in.

6. Research

Research the overall economic health of the neighborhood. Chen recommends using websites such as RealtyTrac and Foreclosure.com to see the number of foreclosed and distressed homes in the area. She says there is a likelihood that in communities with more foreclosures that price corrections will be much more severe.

Copyright 2011 ABC News Radio

Thursday
Mar102011

Apartment Rental Costs Rising as Fewer People Are Buying Homes

Hemera Technologies/Thinkstock(NEW YORK) -- More Americans are renting instead of buying homes, which means those seeking to rent apartments may end up paying more.

The average apartment rental rose five percent last year, and more price hikes are expected to come.

"One thing that's guaranteed is that in the next year rents will continue to rise," says Anna Maria Andreotis of Smartmoney.com.

And if you plan to rent, be careful of hidden costs.  Some landlords require tenants to get renters insurance, and renting out a self-storage space to store what won't fit in an apartment can be expensive.

"On average it costs about $150 a month for a space that's about half the size of a one-car garage," Andreotis says.

Many people are renting and not buying due to worries on job security and for fear of locking themselves into a home they won't be able to sell.

Copyright 2011 ABC News Radio







ABC News Radio