photo: Kumar Appaiah
In 2007, the real estate mantra was buy, buy, buy! The housing market was booming and property offered the best returns for those looking to invest all the money they were making. Then, of course, there were those sexy mortgage deals making it possible for first-time buyers to afford a home.
How the times have changed. Homes are going into foreclosure and the real estate market isn’t looking so hot. But there is good news—even though it may not the best time to buy, it is the best time to rent.
Renting? Right On!
Generally, the rental and housing markets operate inversely. In other words, if it’s a bad time to buy, it’s a great time to rent. If you add to that equation increasing labor mobility, an uncertain job market, and higher costs of living, it makes sense to commit to a monthly or yearly lease rather than a mortgage that may take several decades to pay. You also know what you’re getting with a rental; maintenance fees are included in each monthly outlay, as opposed to the hidden costs associated with buying a home.
What Makes a Happy Tenant?
Most renters are city dwellers, and some cities are better to rent in than others are. For the most part, you’ll find the cheapest rents in the Midwest, but there are more factors to consider. Cost of living, access to public transportation, and a thriving downtown scene are all important when contemplating a place’s livability. The following cities rank high in all of these categories, though they just might surprise you.
The Top Seven Rental Markets
1. Austin, Texas
Austin’s official slogan is, “The live music capital of the world,” and that’s not an exaggeration. Home to the popular South by Southwest festival, Austin also boasts more music venues per capita than any other U.S. city. The University of Texas campus brings in plenty of young, intelligent people to keep downtown vibrant, and large corporations like Dell, Apple Computers, and SUN Microsystems support a strong job market. Though rents here are on the rise as more and more Americans catch on to just how cool Austin is, you can still find a one bedroom in downtown for as low as $545 per month.
2. Portland, Oregon
Mortgage payments in Portland are, on average, about twice as high as monthly rents. Whereas in other places there’s pressure to be in the club of homeowners, those who rent in Portland know they’re making the best financial decision. They also get to enjoy Portland’s outdoor spaces, convenient public transportation, and youth-oriented culture.
3. Wichita, Kansas
Wichita boasts 250 days of sunshine per year and rents are equally as sunny, with 600 square-foot one bedrooms (with amenities!) going for as low as $470 monthly. The city itself is an evolving cultural and entertainment center, offering downtown nightclubs, restaurants, shopping centers, museums, and parks. Wichita has earned media attention for its great living environment; it ranked ninth on Money magazine’s 2006 list of the 10 best U.S. cities in which to live and first on MSN Real Estate’s 2008 list of most affordable cities. Newsmax magazine also named Wichita the most unique American city.
4. Las Vegas, Nevada
Las Vegas’ renters also pay a lot less than its homeowners. The city, with its strip of casinos and hotels, is mostly known as a tourist attraction, but there’s much more to love about the Entertainment Capital of the World. As Nevada’s most populous city, Las Vegas has an arid, desert climate and averages 300 days of sunshine annually. And though some might not want to live in a place with a constant influx of tourists, the tourism industry keeps the cost of living in and around Las Vegas very low, with no income taxes for residents.
5. Miami, Florida
Miami is a great example of a city where the fall of the housing market has benefited renters. Developers built an abundance of condos during the real estate boom that are now being converted to rentals because there aren’t enough buyers for them. That makes for a lot of living options in a city that already has a pulsing night life, beautiful beaches, tropical climate, and a resident university.
6. Oklahoma City, Oklahoma
I know, I know, it’s Oklahoma. But let the city change your mind. If the prospect of scoring a 900 square-foot home with amenities like a fully equipped gym for $490 a month doesn’t get you hooked, maybe the fact that Oklahoma City has the cleanest air in the country will. Or that you can see real cowboys here in the city that’s also home to the National Cowboy Hall of Fame. $490 a month? Yeehaw!
7. Knoxville, Tennessee
Another diamond in the rough, Knoxville is a water lover’s haven. A 600-mile boat ride from the Ohio River, Knoxville provides its residents with more than 1,000 miles of smooth sailing through neighboring states. If living in close proximity to the woods and wilderness is your thing, you’ll also love the fact that you can get a tucked-away one bedroom for $560 a month.
Location, Location, Location
When most people think of renting a city apartment, they think of New York, Los Angeles, and San Francisco. Seattle and Chicago are also popular. But because these cities are already so saturated with renters, prices are high and space is scarce. Provided your job allows you to do so, try to get away from the coasts and hang your hat in these up-and-coming U.S. locations. You’ll be rewarded with low rents, quirky local color, and the sense of being part of a developing city.