Across the US, rent prices continue to rise. As demand for rental space rises, renters are finding themselves getting priced out of their markets. Bozeman has already seen its rental market all but disappear from the influx of MSU students, but as rent rates continue to rise and mortgage rates continue to fall, more and more people are finding themselves on the buy side of the “rent vs. buy” argument.
In the US, rental rates have risen by 6 percent over one year. In major metropolitan areas like San Francisco, Boston and Chicago, tenants are paying far more than 30 percent of their wages to rent. Many property management companies in the Bozeman area limit their tenants to have their rent be 30% of their wages and will almost never accept anybody going higher. However, when demand is high, its not hard to replace tenants, and many landlords are more than willing take on the risk of a renter splurging on their home choice.
In booming college towns, this trend is exasperated because of the high influx of students. Having a lease expire just as college students return to school provides plenty of opportunity to update and raise lease rates, especially in the frantic summer months when thousands of students are looking for housing at once.
From a landlord’s perspective, the market lends itself toward investment purchases, with consistent renters and rising prices. But from the renter’s perspective, if they are anywhere near to buying, now may be the time to take the next step towards home ownership. By buying now, renters can get out from under the worry of being priced out of their market. Maybe 10 or 20 years down the line, they can rent the property out for prices they would have still been paying if they had rented. Either way, anyone considering buying a home as an alternative to rent, now may be the time to reevaluate finances and decide if the plunge may be worth it.