Rental Properties Trying to Catch Up to Homes

Wall Street Journal

The recent real estate boom has affectednot only homeowners, but renters as well.According to the , USapartment vacancy rates dropped to 5.8%in the third quarter of 2005. Also, averageeffective rents—rents that landlords actuallycollect compared to what they request—went up 1.2% to $895. Many landlordshave offered discounted rents to keep theirapartments full and to dissuade consumersfrom home-buying. In the coming years,owners of rental properties are counting onthe children of baby boomers, who are morelikely to rent than to own, to consider theirapartments as an affordable housing alternative.Fortunately for property owners, inmany areas of the country it is considerablycheaper to rent than to buy. For example, inSan Francisco, on average it costs 58% lessto rent than to own, compared to a 33%difference in 2001.