Home and rent prices continue to rise as the year continues. With high inflation and increasing rent prices, the 2022 real estate market makes it difficult to find reasonable housing. As such, tenants must do research and shop smart while looking for a new rental home. If you want to know what you can get for your money, keep reading as we discuss the real estate market outlook for 2022.
What’s Driving Record Rental Rates?
If you’re an experienced renter, then you know that we’re experiencing some of the highest rental rates of all time. But what’s driving these record-high rental rates? Here are a few of the most significant factors of the 2022 real estate market.
- Supply and Demand
- Market Competition
- Landlords Raising Prices
Supply and Demand
With more people interested in renting rather than owning a home, the supply of rental housing is lower than usual. As the demand cannot keep up with supply, landlords are able to set higher rates to match the competitive market. Conversely, if the demand for rental homes decreases, rates may also decrease.
In a competitive market, landlords must set competitive rental rates. Generally, landlords will increase rates as other investors increase their rent prices, and vice versa. As a result, renters are forced to navigate the competition and find a rental that fits their budget and needs.
Inflation has caused the prices of goods and services to rise exponentially. Unfortunately, rental rates aren’t safe from the effects of inflation. As a result, we see inflated rental rates everywhere in the US.
Landlords Raising Prices
Landlords have the discretion to raise and lower rent prices whenever they see fit. As inflation increases, landlords must set prices accordingly. After all, they earn their income from their rental business. Additionally, some landlords are still recouping losses from the Eviction Moratorium that took place over the Covid-19 pandemic.
What Can Renters Do to Shop Smart?
To find a good rental home at a reasonable price, renters have to shop smart and do research before deciding on a property. Here’s how renters can shop smart while searching for rentals in the 2022 real estate market.
- Start Searching Early
- Tour Each Property
- Compare Rates
- Offer to Sign a Longer Lease
- Consider Roommates
Start Searching Early
If you start your search before you need to move, it’ll be easier to evaluate your options and choose the best rental for your budget. However, if you’re looking for rentals last minute, you could be forced into a lease you’re not 100% satisfied with. As such, it’s essential to start searching for a new place around 90 days before you plan to move. This will give you enough time to find a few contenders, tour each place, and decide where you’d like to live.
Tour Each Property
Another way to ensure you’re getting everything you want from a rental home is by touring each property you’re interested in. If you go with the first property you find and tour, you could miss out on potentially better rental properties. Instead, thoroughly examine each property, consider the amenities, compare locations, and make an informed decision on where you’d like to live. Washington DC property managers can provide you with information about the property and ensure a thorough property tour.
Before deciding on a rental property, comparing the rates of apartments or rental homes in your area is important. After all, you don’t want to overpay for a small, outdated rental apartment when you could get a better deal at a more extensive, nicer property. So make sure you’re looking at several different apartments and comparing rates for each one.
Offer to Sign a Longer Lease
Some landlords are willing to slightly lower rent prices if they know you’re going to be a long-term tenant. If you’re not planning to move out of your current city, ask your landlord if they’d be open to a longer lease agreement for a lower rental rate. This benefits you and your landlord since they won’t have to worry about marketing a vacant rental once you move out.
If you’re unsure how you can afford to live on your own, consider finding a roommate. Living with a roommate can split your rent and utility costs in half. First, however, you have to be comfortable living with someone else. If you plan on living with a roommate, come up with a roommate agreement to avoid disagreements and ensure you’re on the same page regarding house rules and expectations.
What Will $2,000 Get in Various US Cities?
The average rent in the United States hit an all-time high this year. In the 2022 real estate market, the average rent for a one-bedroom rental is around $1,800. Just two years ago, in 2020, the average rent for a one-bedroom rental was around $1,090. As you can see, this increase is massive.
In the past, $2,000 could go a long way for rental housing. However, these days, $2,000 doesn’t go very far. Here’s what you can get for $2,000 in some of the largest US cities.
- Nashville, TN – $2,167 for a 1-bedroom rental
- Philadelphia, PA – $2,172 for a 1-bedroom rental
- Orlando, FL – $1,907 for a 1-bedroom rental
- Plano, TX – $1,955 for a 1-bedroom rental
- Anaheim, CA – $1,905 for a 1-bedroom rental
In more popular cities in the US, rental rates are much higher. Additionally, if you’re looking for a rental with more than one bedroom, you can generally expect to pay more than the above rates. Overall, $2,000 doesn’t go very far regarding rental rates.
If you’re looking to live in a city with more reasonable rental rates, some of the top cities offer 2-bedroom rentals below $2,000 include:
- Tampa, FL – $2,108 for a 2-bedroom rental
- Raleigh, NC – $1,974 for a 2-bedroom rental
- Vancouver, WA – $2,030 for a 2-bedroom rental
- Houston, TX – $1,873 for a 2-bedroom rental
- Boise, ID – $2,109 for a 2-bedroom rental
Tips for Knowing How Much You Can Afford
Before you search for a new rental home, knowing how much you can afford is crucial. After all, you don’t want to stretch yourself too thin and find yourself unable to pay for necessary expenses. So here are a few tips for knowing how much you can afford.
- Create a Realistic Budget- It’ll be hard to understand how much you can afford to pay for a rental home without a budget. Consider your current income and expenses and recognize how much you have left for rent.
- Research the Market- Look at the current market and understand the average rates in your area, so you know what to expect. Then, you can plan for the expense and set aside money accordingly.
- Use Tools to Calculate Affordability- If you don’t want to do the math yourself, several online tools can help you calculate affordability. Just plug in your expenses and your income and find out how much you can afford for your monthly rent.
Consider All Your Rental Options
Nowadays, more people are interested in renting instead of buying homes. After all, the 2022 real estate market is highly inflated, and buying a home is becoming increasingly difficult for the average American. As such, more people are turning to rental homes to live in.
If you own rental homes, you know how important it is to keep your tenants happy. Luckily, with a trusted property management company on your side, you don’t have to worry about the day-to-day tasks of running a rental home.
Bay Property Management Group offers comprehensive rental management services to ensure investors and tenants are always satisfied. Contact BMG today if you’re looking for rental management in Baltimore, Philadelphia, Northern Virginia, and Washington DC.