Renting is something that many Americans find themselves doing at some point in their lives. It's especially common for young professionals to rent instead of buy when they are just starting out. However, rent is increasing at a rate that is more than many can afford throughout much of the country. Around 26 percent of households who rent spend half of their income on rent alone. While home ownership may be a goal for many of these renters, it can be hard to save up for a home when rent is so high. Here are three things that renters can do when rent outpaces their income.
Purchase a Home
It may surprise some renters to find that it's actually cheaper on average to pay a mortgage than it is to pay rent in 42 states. The biggest hurdle that many have is coming up with enough money to put down a down payment. The good news is that there are plenty of mortgages that are now available with low down payments or even no down payments. Another hurdle is finding a home within a certain budget. In areas where it is expensive to rent, it's also often expensive to buy. An experienced realtor can help locate an affordable property.
Hire a Realtor
Hiring a realtor is a great option in areas where rent is becoming less affordable with time. For renters who are interested in owning a home, a realtor can help locate suitable properties. There are also plenty of realtors who are able to locate more affordable rental properties. These realtors will often charge a brokerage fee for finding a renter a new property to rent. This fee can vary greatly depending on the housing market. In high demand areas such as New York City, this fee is typically between 8.5 and 17 percent.
Move to a New Location
Unfortunately there are times where rent is so high that it becomes necessary or less financially burdensome for renters to move out of the area. Moving to a new area, sometimes just a few miles away, can lead to some major savings in many cities in the US. A realtor can help a renter locate areas where rent is less expensive. They can also help find properties that are near things like public transportation and other amenities.
Increasing rent prices are something that many are dealing with and will continue to deal with in the future. When rent becomes too high there are a few different options. In many areas, purchasing a home is less expensive than renting one. Hiring a realtor may also be a good choice since they can locate rental properties that are less expensive. Another option is to move to an area where rent is less expensive.