Back in 2010, Jimmy McMillan – a dude who looks like he is straight out of a Quentin Tarantino film – ran for Governor of New York as part of “The Rent is Too Damn High Party.” Flash forward to 2022, and forget about Democrats and Republicans, this is a party we can all get behind. The rent IS too damn high.
Here in South Florida, there are different factors contributing to why the rent is SO damn high versus New York City, which has its own special real estate ecosystem, though there are some similarities. Nationally, there is and will continue to be a housing shortage. There has been upward pressure on home values brought on by the pandemic, that have been in turn driving up rents. Homes are worth more and people prioritized having larger and nicer spaces after realizing they could get stuck in their home as the “everything” place – work, homeschool, gym, restaurant – for months on end. Low interest rates meant to keep the economy going drove an even greater frenzy of buying, limited inventory and higher home prices.
Interest rates have begun to increase and will continue to this year, but that didn’t happen soon enough to combat the huge increase in home prices, and those increases, dear renters, are getting passed on to you. This is why many are going to renew their leases and facing the harsh reality of 20 to 30 percent – or more – rental increases. And that’s not just anecdotal, Google “South Florida rental prices” and you’ll see numerous recent news stories about how rates have gone up by about a third or more in the tri-county region of South Florida. So, what can be done?
Formulate Your Buying Plan
It’s always a good idea to have a conversation with a trusted real estate advisor to help determine what makes the most sense for you, wherever you’re at financially. Buying a home would enable you to lock in a relatively stable housing cost – I say “relatively” because there are always unforeseen expenses that can pop up in homeownership – it’s essential to know how close or far away you are from being able to realistically buy. You may be closer than you think. For example, many people are under the impression you have to put 20 percent down to buy a home, and that’s not the case in all circumstances. Granted, you will have to pay for private mortgage insurance (PMI) if you put down less than 20 percent, but the extra cost might be worth it, and given how quickly home values are increasing, you may not have to pay for long. It’s also good to work with a Realtor whether you’re renting, buying or just thinking of buying (or selling) so you can establish a relationship with someone you know you can trust, and have them in your corner when you need them.
Lower Your Rent or Change Your Situation
Owning your primary home is not always the best choice every time. Some of us go through seasons of owning and renting, and some are Forever Renters, and that’s okay – especially if you have a great place to live, fabulous location, an awesome landlord/management company and the right amount of space and amenities for you. However, if the rent is suddenly too damn high, or your dream situation turns into a nightmare for another reason, it’s time to reevaluate. Maybe it’s time to go a little outside your ideal area to an up-and-coming neighborhood, or a nearby community that is close to where you are now, but more affordable. Maybe it’s time to consider a roommate. There are always options if you are willing to get creative. Short-term renting is another option to give you an opportunity to test-drive a community before committing to a longer lease or a purchase.
If your rent is too damn high and you’d like to explore your options to buy or find a new rental, or if you’d like to sell your home now before interest rates increase, I would love to help. Please reach out at 954.224.2825 or email@example.com.