By Josh LiskupicThe Real Estate Developers Association of America (REBA) has issued a warning to renters of a growing trend of real estate developers charging renters for rent, which could lead to more renters being evicted from their homes.
According to the REBA, rent is becoming more and more important as renters increasingly struggle to pay for their homes and become frustrated with the lack of affordable housing options.
“This new trend of rent collecting is making it more difficult for renters to make rent payments, especially if they are unable to get a loan to purchase their home,” said John S. Hensley, President and CEO of the REBAA.
“While we applaud the REBs for making the rental payment option accessible to renters, we believe this trend of rental collection and evictions will not only have a negative impact on the affordability of rental housing, but also the quality of life of renters.”
According to a recent study by the nonprofit organization HousingWorks, between 2009 and 2015, the average number of renters evicted in the United States increased by more than 4 percent, from 1.4 million to 2.1 million.
Rental housing costs are also a major factor in determining who pays for a home.
According to a study by mortgage company CoreLogic, renters in the Midwest who pay $300,000 or more for a single-family home in the middle of the market have a 2.4 percent higher chance of losing their home.
Hensley said that while landlords have long tried to keep rents low, the housing crisis has changed their mindset.
“Rents have risen significantly in the past five years,” he said.
“People have taken their rents up to a point that they can’t afford the mortgage or can’t get a job, and now they are making those decisions about who they want to pay the rent.”
Rents can increase substantially as home prices increase and rents in general are increasing, as well.
In some cases, renters are unable or unwilling to pay their rent and end up losing their homes due to foreclosure, which is a form of eviction.
The REBSA is asking renters to take a few simple steps to ensure they are able to afford their rent:1.
Make sure that your lease provides a clause that limits the amount of rent you can charge.2.
Check your property management company’s website for a copy of your current and anticipated rental agreement, and review it frequently.3.
Use the local government rental agency’s rent calculator to determine how much rent you should charge for your property.4.
Make payments as soon as possible, and if you have any financial issues, contact your local city or state housing department for assistance.REBA recommends that renters keep a budget for rent and how much they will be paying for a month.
According the REBB, renters should also monitor their monthly expenses.
“As a rule, a tenant should keep a monthly budget and a budgeting system that keeps track of what they are spending and what they have left over, and when they are going to pay it,” Hens of REBA said.
“In addition, renters need to make sure they keep up their mortgage payments, and be aware of the risks associated with any new mortgage.”
If you are interested in becoming a REBA member, visit the REBS website.
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