How to Rent in a Landlord's World: Tips for Today's Market
In the first quarter of 2011, rents rose 2 percent nationally and are expected to increase by 3 to 4 percent over the remainder of the year, according to Christina Argon at Rent.com. Vacancy rates have been dropping as well. Nationwide, they were 8 percent in the first quarter of 2010. This year, in the same period, that number was down to 6.2 percent.
According to a new survey of 1,252 property managers by the credit research company TransUnion, 64 percent of large property owners raised rents last year. TransUnion also reported that half of all property managers saw an increase in applicants moving into rentals from foreclosed properties. Demand is also stemming from young professionals ready to move out of roommate situations into one-bedroom apartments, says Aragon.
The tightening rental market may be a good sign for home sellers (some economists say it's an early indicator for a housing market rebound) but not so great for renters, who face rising costs, fewer concessions, and more competition for good apartments. If you're in the rental market -- and more than a third of Americans are -- what can you do?
Understand How a Landlord Reads Your Credit Report
Applying for an apartment or other rental, invariably requires a credit check. As more and more foreclosed homeowners move into the by-lease market, the emphasis on sterling credit scores is lessening. Instead, landlords are focused on other credit indicators, like a good track record for recurring monthly bills.
Steve Roe, a vice president for TransUnion's rental screening unit, says a foreclosure is not quite the black mark on a credit report it once was. Many property managers "remove it from the overall equation and look at overall credit profile," he told DailyFinance. Instead, landlords are looking at overall credit worthiness, examining whether your recurring bills are paid and whether there's a history of late payments.
Christina Aragon, director of strategy and consumer insights for Rent.com, says potential renters need to understand what is an explainable ding on a credit report, and what is not. The ones in the latter category include late payments for utilities and day-to-day bills. For smaller landlords who may not impose a formal credit check, the most important thing for rental applicants is to show is the ability to pay rent on time with a letter or recommendation from prior landlords.
But landlords, especially in large properties, are not just reading your credit report. "Consumers need to understand that the majority do check credit and criminal background," says Roe.
Read the full story at DailyFinance.
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