Prospective landlords need to factor in the risk of further declines in the value of the property and take into consideration that the pool of eligible renters in a price range is diminishing due to persistent high levels of unemployment across the country.
There is a trend developing too where larger numbers of people are sharing less space as cohabitation is clearly cheaper than trying to maintain a residence on your own. Families are moving back in with each other. Children are staying with their parents instead of leaving home and millions of rooms in private homes are being “let” to help with the mortgage payments.
As this trend continues rents will surely decline further.
Most rents are staying the same for me, but I have been able to raise a few, and not cut any. Actually, Its much easier to rent our properties now, then during the housing boom when everyone was buying. We have had very few vacancies over the last 2+ years.
The problem with speculating on foreclosed homes and renting them, presumably for a few years until prices warrant a re-sale, is that the margin of error must consider not only the rehab and maintenance costs, but future property taxes. Many existing homeowners are going to be “shocked” by their new tax bills this year; in many areas of public union intransigence they will be going up, not down.
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