I was talking to a property manager this past weekend who has been managing rentals in San Diego for 30 years. I asked him what he is seeing for 2017 and he said all of his properties are seeing on average 4% rent increases this year.
This is true for the rest of the country as well. Rent was up nationwide in 2016 so will that trend continue in 2017? So far the answer looks to be yes. Here’s a better question for all the renters. What is your pain tolerance for another rent increase in 2017? And here’s an even better question. With home value increasing how much equity did you earn last year by paying rent?
If you are paying $2,500/mo in rent and you see a 4% increase that calculates to $100 more rent per month. Right now with mortgage interest rates where they are that $100 = $20,000 in home price. Another current fact is that mortgage applications are down and lenders are looking for ways to increase loan volume which means they have enhanced credit guidelines so that borrowing money is easier.
By David Hughson
Mortgage Planner / Turning Renters Into Homeowners