NEW YORK -- Even though mortgage rates are at historically low levels, it's the rental market in many areas across the U.S. that is really heating up. Obtaining a mortgage is undoubtedly a strenuous process on the heels of tightened credit standards. Add to that the fact that many Americans simply can't afford a new home, the number of Americans still jobless or just getting by -- and many consumers are finding it easier, or necessary, to rent, which explains why the average rent nationally is at its highest level since 2007, according to researchers at Reis.
Testifying on Capitol Hill in the aftermath of the housing crash, Treasury Secretary Timothy Geithner spoke words that previously might have been considered political suicide: Geithner suggested that homeownership should no longer be considered a singular measure of the American Dream -- and maybe every American shouldn't own a home.
Welcome to the post-housing bubble renter's society. Geithner didn't mention it, but his words implied that the do-it-yourself projects associated with the American Dream of home ownership should be applicable to the growing ranks of renters across the nation.
When renting, it doesn't make sense to complete a major renovation, like flooring, new windows or a new kitchen. Throughout the duration of your lease, however, there are some easy and inexpensive projects you can do yourself to spruce up your rental. MainStreet asked design pros to weigh in on the top DIY projects for renters.
Replacing a Showerhead
If you've ever thought the weak water pressure in your shower has nothing to do with the low-flow showerhead installed by the building to minimize their water bill, think again. Chances are the showerhead in your rental needs to be replaced -- whether or not it's because the landlord installed a low-flow head. You, and your hair, will be very happy if you complete this project, and thankfully, this isn't a lengthy or costly job.
First off, it's helpful to know the types of showerheads so you can easily narrow your choices when selecting one at a home improvement store.
"There are two main categories of showerheads to choose from: fixed or handheld. But within these categories is a wealth of options -- from rainshowers to multi-setting versions," said Andrea Conroy, director of retail marketing at Moen.
And as for the actual installation of your new showerhead, here's what Controy suggests:
1. Unscrew the existing showerhead from the shower arm, using a crescent wrench if necessary.
2. Remove any old thread seal tape and apply new by wrapping the tape around the shower arm threads two to three times.
3. By hand, screw the new showerhead onto the shower arm. Use the wrench to tighten the new showerhead. If installing a handheld version, first screw the handheld bracket to the shower arm and tighten with a wrench. Then, attach the hose and handheld shower to the handheld bracket.
Choosing the Right Paint Color
Any time you move into a new place, chances are you'll be painting the kitchen, bedrooms and living room. When choosing what color to paint your rental, there's a "science" behind different colors.
"Blue colors elicit feelings of tranquility and confidence. This is the least appetizing color, so it should not be the main color in a kitchen," advises Chris Ring, v.p. of ProTect Painters.
"Yellow enhances concentration, speeds metabolism, and is perfect for kitchens and bathrooms," Ring advises.
Pink colors are on the tranquilizing end of the color mood scale, making a pink shade an appropriate choice for bedrooms.
For this and other painting tips below, do keep in mind that even if you are a Michaelangelo, you may have to repaint the walls to white when you move out, and/or take the risk of a landlord trying to claim part of a security deposit as a result of a custom paint job. As such, it's best to ask for a landlord's approval to paint and agree to terms before undertaking the project.
Painting the Bathroom
Painting a tiny bathroom makes for a challenge, especially when trying to paint around the sink, mirror and shower.
"Before painting, wash all the walls to remove any mildew with mildew remover or bleach and water," advises Joe Kowalski, training manager at Glidden.
And for your bathroom painting job, Kowalski adds these recommendations:
For walls, use either a semi-gloss or eggshell finish; both provide dirt and moisture resistance.
For the ceiling, paint with an eggshell finish is advised.
Paint that includes primer provides extra adhesion over a glossy surface.
More Storage Is Better
Whether you're sidestepping into your small studio rental or fortunate enough to be renting a place with enough closet space, tips for maximizing your rental's storage space always come in handy.
1. Place a removable, peel-and-stick wall decal on a bare surface (whether it's on a wall or the back of a door.)
2. Rub the surface of the sticker with a squeegee to ensure that the decal lays smoothly against the wall.
3. Add a hook onto the decal and apply pressure to ensure damage-free hanging.
4. Wait one hour before hanging hats, jackets, backpacks and other apparel.
Hiding Your Lamp Cord
Cords can make your rental a cluttered mess as well as an electrical hazard for children. Lee offers these easy steps for making the cord "disappear":
1. Use a hand drill to create a hole in the bottom of a metal gelatin mold.
2. Run a pre-wired pendant cord through the hole of the mold.
3. Insert a light bulb into the end of the cord.
4. Affix cords to wall in decorative loops using clear cord clips for damage-free hanging.
Median home price in 2012: $122,000
Projected home price in 2015: $121,087
Projected annual rent in 2015: $12,829
Home prices in Sin City are still greatly depressed -- down 62% from the 2006 peak, according to the S&P/Case-Shiller home price index -- making for some great bargains for investors. Meanwhile, rents continue to climb, according to a recent report from HomeVestors based on analysis by Local Market Monitor.
Of the 316 markets Local Market Monitor reviewed, Las Vegas ranked number one based on estimated returns on investment for single-family rental properties.
Cities were ranked by estimated future returns investors can expect when they buy single-family homes and rent them out. According to Local Market Monitor's data, for example, investors in Las Vegas will have a 5.6 percentage-point higher return on a rental property than the national average of 5%.
But there are risks with investing in cities like Vegas. The markets with the highest ratings are typically those where home prices have plunged the most, said Ingo Winzer, founder of Local Market Monitor.
And in Vegas, investors are buying up so many properties and turning them into rental properties that there is a glut in supply, said Winzer. In some cases, that could make it hard to find tenants. And letting a property sit vacant could take a big bite out of profits since an empty place can pile up expenses quickly, he said.
Median home price in 2012: $78,000
Projected home price in 2015: $93,982
Projected annual rent in 2015: $9,016
It's hard to imagine that home prices could get any cheaper in Detroit.
Hit hard by the auto industry's financial troubles and the housing bust, median home prices in the area have been cut almost in half to $78,000 from a 2004 high of $157,000, according to the National Association of Home Builders (NAHB).
And with rents on the rise -- up 5% over the past 12 months, according to Rent Jungle -- these beaten down home prices have created a nice opportunity for investors.
Even better, renters' incomes have become more stable. The auto industry has started down the road to recovery, giving a nice boost to the local economy. The metro area unemployment rate has fallen by 2.4 percentage points over the 12 months ended in April to 8.7%.
Winzer figures investors will earn 4.6-percentage-point higher return than the national average over the next three years.
Median home price in 2012: $114,000
Projected home price in 2015: $123,282
Projected annual rent in 2015: $11,048
In a market like Daytona Beach, where the median home price is down to $91,000, most homes are very affordable. But many locals still aren't buying.
"By and large, single-family homes are not priced beyond the reach of renters," said Winzer. But bad credit histories, often due to past mortgage payment problems brought on by Florida's severe housing bust, have made it difficult for many local residents to get mortgages, forcing many to rent.
For real estate investors, that means there's plenty of demand.
And the risks associated with renting in the area, which was hit hard by the housing bust and recession, have also started to subside. Unemployment dropped by 1.9 percentage points to 8.7% over the past 12 months.
Even with the lingering economic issues in the area, there's a lot of potential reward, according to Winzer. The estimated return for landlords in Daytona is about four percentage points higher than the national; average, according to HomeVestors.
Median home price in 2012: $115,000
Projected home price in 2015: $150,491
Projected annual rent in 2015: $13,105
Landlords in Orlando have been seeing a nice return on investment recently. Rents in the metro area rose about 7% over the 12 months ended in March, according to Rent Jungle, as homeowners displaced by foreclosure sought rental properties.
For those looking to buy in this market, properties are pretty affordable: Home prices are down to levels not seen since 2000, according to data from NAHB.
With Orlando's economy on the mend, the risks for investors are fairly low, said Winzer. Orlando's unemployment rate has come into close alignment with the national average, standing at 8.2% in April.
Plus, the metro area population continues to expand, rising 1.5% in the 12 months ended July 1, 2011, sparking more demand for rental housing.
Median home price in 2012: $114,000
Projected home price in 2015: $116,706
Projected annual rent in 2015: $9,308
General Motors put Warren on the map in the 1950s, employing thousands of engineers and technicians and making the town one of the wealthiest in the state.
But when car sales collapsed, so did the local economy. The median home price in Warren has dropped to $114,000 from $175,000 in 2005, according to NAHB.
As in Detroit, the biggest risk for investors in Warren is the economy, according to Winzer. If the auto industry continues to heal, the market for rental houses should remain steady.
Winzer expects to see a slight increase in the metro area's home prices by 2015 and to see rents climb as well as the auto industry continues to rebound.
Median home price in 2012: $115,000
Projected home price in 2015: $135,660
Projected annual rent in 2015: $10,628
When the housing bubble burst in Bakersfield, it really hit hard. Many residents lost their homes to foreclosure, leaving them little choice but to move into rental properties.
That has been a major boon for landlords in the area. In the 24 months ended in March, rents increased by more than 20%, according to Rent Jungle.
For those looking to get into the market, home prices are cheap at a median of $115,000, according to NAHB, That's almost 60% below the high set back in 2006.
Given that Bakersfield has a diverse range of industries -- oil and gas production, agriculture, manufacturing -- it's a lot less risky than a city like Detroit, said Winzer.
That said, Bakersfield is still struggling to recover from the severe hit it took when the housing bubble burst and unemployment -- which stood at 14.5% in April -- is still a major issue.
However, if jobs recover a little more quickly, real estate investors could be rewarded with some modest home price appreciation -- in addition to their rental profits, said Winzer.
Median home price in 2012: $135,000
Projected home price in 2015: $162,053
Projected annual rent in 2015: $12,268
Phoenix has become an investor's market, with many of the city's properties being turned into rentals to house those displaced after the housing bubble collapsed.
Demand for rental properties in the area has helped rents climb by about 7% over the past two years, according to Rent Jungle.
Also on the rise is the local economy. "Phoenix is doing much better than I thought it would," he said Winzer. "The economy has recovered nicely, growing 2.2% over the past 12 months."
But for investors, the best time to act may be sooner rather than later. Housing inventory in Phoenix has shrunk and home prices are on the rise. During the first three months of the year, home prices were more than 5% higher than they were in the year-ago period.
Median home price in 2012: $122,000
Projected home price in 2015: $164,253
Projected annual rent in 2015: $12,255
A knotty foreclosure problem has plagued Atlanta's housing market, with thousands of vacated homes weighing on home prices.
In March, the city recorded a 17.7% drop in home prices, the largest 12-month decline of any of the 20 cities covered by the S&P/Case-Shiller home price index.
Displaced former homeowners have helped push rents 12% higher over the past 12 months, making for some healthier returns for investors.
However, the risks remain in Atlanta, with plenty more foreclosures still being moved through the pipeline.
Median home price in 2012: $137,000
Projected home price in 2015: $152,509
Projected annual rent in 2015: $11,366
Unlike most of the other cities on this list, Reno's market is more popular for investors looking to buy vacation -- rather than residential -- properties.
"Reno is much more of a second home market for people from Northern California," said Winzer.
As such, it tends to reflect the market trends of cities within an easy drive, including Sacramento, San Jose, and, especially San Francisco.
But while Reno's status as a major vacation destination can be attractive to investors, it can also be a risk.
"Vacation home markets tend to be volatile," said Winzer. The prices may track the trends of coastal markets but the swings can be much greater.
One saving grace for investors, however, is that home prices are much lower in Reno than they are in other major cities. At a median of $137,000, Reno homes sell for about a quarter the price of San Francisco real estate. And rents should bring in above average returns, about 2.5% percentage points higher than the nation as a whole.
Median home price in 2012: $100,000
Projected home price in 2015: $150,271
Projected annual rent in 2015: $11,186
For investors, Tampa seems like a perfect place to buy a rental property.
At a median price of $100,000, homes are relatively cheap. And rents are on the rise, having gained about 4% over the 12 months ended in March, according to Rent Jungle. In addition, the economy is on the upswing, with a recent uptick in job growth.
However, there are some risks that real estate investors should be aware of, according to Winzer.
One problem: An abundance of shadow inventory of homes in foreclosure that are already repossessed and vacant but have yet to come on the market. When they do go on sale, they could push home prices even lower but also make it more difficult to find tenants.