The squeeze is on! Rents have definitely been on the rise in the last few years. I wrote about rising rents here. Problem is, everything else is going up as well as the graph below from David Stockman’s ContraCorner.com demonstrates.
I had a suspicion people were going to have a hard time paying all of these inflated prices, now there is some proof.
A recent article in The Guardian demonstrates my concerns. People are cutting back to be able to afford the rent.
The high cost of private rents is forcing some tenants to cut back on heating and food, according to a poll, underlining the pressure rising housing costs are putting on household finances.
A survey of 1,000 tenants commissioned by the campaign group Generation Rent found two in five had reduced their energy bills, while a third have skimped on food to cut costs. The group, which is calling for reforms, including a national register of landlords and more affordable privately rented homes, said that the number of people facing problems is rising as the number of tenants grows.
Yes, this article references the UK, but you can bet the same thing is going on in this country. It will not be long before people start “cutting back” on the rent or calling for “reform” of the rental property market. Stay tuned!
And this is precisely why you should NEVER take tenants making less than 3.6x the rent in income. They do not have any extra, and you will wind up subsidizing their household with free rent before they are evicted or move out.