The analysts predicted that apartment rents in Tampa will drop further by four percent even if demand will rise slightly. The average vacancy rate is expected to rise to 10.8 percent from the previous month’s rate of 10.5 percent.

The average apartment rent is also expected to fall this year to $767 from $797 in 2009. Rents have fallen by about 10 percent from the average rent of $843 in 2008.

Over the same periods, vacancy rates have grown sharply from 6.9 percent in 2007, when a lot of condo conversions occurred, to 8.7 percent the following year. The months between 2008 and 2009 experienced drastic vacancy increases as the period accumulated nearly 180 basis points in rate growth.

In the Marcus & Millichap study, which surveyed 544 major rental markets across the U.S. for its 2010 apartment report, Tampa again ranked 40th based on economic performance. It was preceded by Fort Lauderdale in the ranking, but it performed better than West Palm Beach. Jacksonville ranked the lowest among Florida markets.

Washington, D.C. remains the strongest market in the U.S. for multifamily properties for rent despite a strong competition from San Diego, which surpassed four places in the ranking to become the second strongest.

According to real estate analysts, the U.S. capital is expected to emerge from the downturn much ahead of other metro areas. San Diego, meanwhile, is expected to continue experiencing lower vacancy rates and higher rental rates.

One concern that could affect rental property recovery is the shadow rental sector – comprised by properties not formally registered or not yet approved as rentals. Fannie Mae has been planning to allow distressed owners of Fannie-guaranteed homes to rent the properties for up to one year as they find out ways to reorganize their finances and weigh their housing options. This could further beef up the shadow market.

Investors looking to enter the property rental sector can explore student housing, Marcus & Millichap advised. In 2009, student housing exceeded rental expectations and surpassed apartment rental performance, posting a nationwide vacancy rate of only 7 to 7.5 percent.

Additionally, investors can also consider properties for rent in Tampa, where the median price in rental communities have dropped from $58,438 per apartment unit in 2008 to $54,671 per apartment unit in 2009.

Because of low rents, landlords cannot collect enough money to make repairs, even emergency repairs like burst pipes. Banks that foreclose on rental properties also refuse to make repairs, arguing that the properties have become nonperforming assets.

One rental building in Arbor Hill facing foreclosure is the multi-unit apartment complex at 299 Clinton, which is owned by nonprofit affordable housing entity St. Joseph’s Housing Corporation.

Due to financial difficulties, St. Joseph’s defaulted on its loan payments for its rental buildings in Arbor Hill, including 299 Clinton. Mortgage lender JP Morgan Chase Bank was forced to file foreclosure actions against St. Joseph’s Housing.

In December 2008, lawyer William Keniry was appointed by a New York Supreme Court judge as receiver for the Clinton property and other buildings owned by St. Joseph’s which are in foreclosure.

But despite the receivership, tenants of 299 Clinton and other buildings failed to get the repairs and maintenance that they needed. Keniry explained that St. Joseph’s did not have enough money to pay for repairs and that the rents collected were not enough to repair the homes for rent.

Keniry added that JP Morgan Chase also refused to provide funds for repairs, stating that the rental buildings were nonperforming assets. According to housing advocates like Roger Markovics of advocacy group United Tenants of Albany, disputes between landlords and mortgage lenders have become common during the economic downturn.

Markovics said that oftentimes landlords facing foreclosures have given up and therefore have no more interest in or money for making repairs. Similarly, bank lawyers make arguments about the lack of accountability of banks for needed repairs and maintenance work.

In December last year, St. Joseph’s Housing filed documents in court for bankruptcy protection to block JP Morgan from auctioning off the rental buildings. Martha Hobbs, head of St. Joseph’s, also blamed the receiver for not winterizing the buildings and for the worsening of the conditions of the buildings.

But according to housing advocates, St. Joseph’s Housing has a history of not being able to maintain its properties and properly screening renters. In response, St. Joseph’s argued that it cannot raise rents to a level where it can collect enough to be able to make needed repairs and maintenance on its homes for rent.

Under this new legislation, owners of rental housing built after 1979 will have to follow tenant eviction laws followed by owners of residential rental properties built before 1979. Under tenant eviction laws prior to 1979, landlords are prohibited from evicting renters without a reasonable cause. Tenants can only be evicted by just reasons such as breach of lease contract or failure to pay rent.

The new legislation would affect about 20,000 residential rental properties built after 1979 and about 10,000 units more which are being constructed or being planned.

While tenant advocates were elated at the approval of the eviction protection legislation, they cannot claim complete victory yet because the legislation still needs approval from Mayor Gavin Newsom, who had expressed strong opposition to the legislation that would add more challenges to those currently faced by owners of house rentals.

According to spokesperson Joe Arellano, Mayor Newsom planned to veto the proposal, and his veto can be upheld if the final voting by the board gives him the majority. The latest voting, 7-4, needed one more vote so that the legislation would become veto-proof.

The board will again consider the legislation to get the veto-proof majority, but the swing vote – expected to come from Supervisor Bevan Duffy – may not be easy to get. According to Duffy, he does not plan to change his vote.

But Duffy, who has expressed his plan to run for mayor in 2011, is being pressured by renters and tenant advocates to change his vote. Sara Shortt, head of the Housing Rights Committee of San Francisco, said that voting for the proposal should be an easy decision for any city lawmaker because 60 percent of the city is comprised by renters and there is a shortage of affordable housing.

According to Duffy, he would have voted yes if the legislation focused on evictions due to foreclosures. He argued that the legislation would have unintended consequences.

In addition, real estate owners and investors in San Francisco argued that the new legislation would diminish real estate rights and violate a pledge made by city officials to owners of house rentals when they enacted the rent control law in 1979.

There is a lot of evidence that prove this fact. For instance, Allstate Corp, an insurance company for homes, said that more homeowners are converting their house insurance policies to ones that would give provisions for a home lease. According to Mike Nelson, president of the Rental Homes Professionals Inc, the number of houses for rent has increased now more than ever. The foreclosure crisis is the main reason for it.

Jim Bass, a realtor in Frederick Md, the rising demand for services related to managing properties have caused them to stop providing to new clients anymore. One client has already been renting his house for $2,995 a month after he failed to sell it at a price of $790,000. The rent is not enough to pay for the home mortgage, but they have no choice now. Bass says that in two years, he hopes that the market would be able to recover so that homeowners, landlords and tenants as well would be able to get back what they lost from the recession.

A lot of experts in the industry say that renting out is not the best answer and solution for their financial problems. In key areas that were hit hard by foreclosure, prices of houses are not expected to increase anytime soon. Landlords would then have to pay for insurance, maintenance and other costs. Demand for apartments in other areas is also weak, and so rent also sees a decline. With this situation, a lot of landlords are not able to compensate for their expenses and home mortgages by just renting out their homes.

A lot of homeowners do not have choice. Those who have to relocate to another area have to do something with their homes. With more and more Americans finding themselves in new situations and new grounds, more and more rental houses come up, increasing the competition and giving a hard time on the rental industry.

A lot of apartment rentals in Modesto are being offered at only $400 per month, with the first months free for renters signing one-year lease agreements.

According to RealFacts, the apartment vacancy rate in Modesto over the past three months was 10 percent, among the highest rates in California. The average apartment rent in the 28 biggest apartment buildings in Modesto has gone down to $816, not including further discounts given such as free rent.

At the Meadowlakes Apartments, two-bedroom apartment units are being rented out at $695, a 19-percent drop from their usual rate of $830. Wanda Francek, manager of the 196-unit Meadowlakes, said she had to offer deep discounts because of the rising vacancy in the complex.

There is also another trend being observed in San Joaquin – tenants are now moving out of apartment rentals and moving into rental homes. Because of plenty of cheap foreclosures purchased and turned into rentals by investors, there are now a lot of houses for rent in the area.

Over the past 3 years, over 16,400 homes in Stanislaus County were foreclosed, including 7,800 foreclosures in the Modesto area. Many of these homes were sold by banks and other lenders to investors who converted them into rental homes.

In Stanislaus County, the number of rental units has risen by almost 6 percent from around 57,500 units in 2005 to over 60,800 rental units in 2008.

Ben Sweet, manager of Sweet Properties in Modesto, said that apartments and other multifamily properties have suffered because of the increased number of single-family homes that can be rented for the same amount.

Sweet said that he has reduced the rent for a two-bedroom house to $575 and a three-bedroom house to $950 and offers a 50-percent discount on the rent for the first month.

According to Sweet, rates for rental homes have gone down by five to 10 percent over the past year. A three-bedroom house with two bathrooms now rent for only around $1,100, down from around $1,250 during the boom.

Bigger houses are even tougher to rent out, according to rental managers. Houses for rent offered above $1,350 are not being rented. These big houses were easily rented out at $1,600 during the boom.

Using data from the U.S. Census Bureau, the center also found that renters in New Orleans spent more for rent and utility bills than renters in the other cities studied in 2008, including Las Vegas, Baltimore, New York City, Milwaukee, Memphis, Phoenix and San Antonio.

Out of all New Orleans renters, 41 percent spent at least half of their pre-tax salaries for their rental housing.
In Jefferson Parish and Saint Tammany, 27 percent of households spent 50 percent of their income for rent.

Last year, the median monthly rent in Saint Tammany was $982. The median in New Orleans was $908 and the median in Jefferson was $854.

According to affordable housing advocates, the burden of paying rental costs in New Orleans is heavier because of increases in costs of living in the metro area.

Landlords in New Orleans also explained that they have to increase their rents because they spent high costs in building and maintaining their house rentals after the Katrina disaster.

Homeowners in New Orleans also bear heavier housing burdens than other cities because of increases in the costs of insurance premiums, taxes and utilities in the metro area.

In Saint Tammany, 27 percent of homeowners spent more than 33 percent of their monthly income on housing costs while Jefferson homeowners spent 26 percent – lower than the nationwide average of 31 percent.

Among lower-income New Orleans homeowners, 36 percent spent more than 33 percent of their income on housing costs. Low-income homeowners particularly have been suffering because 81 percent of them spent more than 33 percent of their monthly income on housing costs.

Housing advocates cite the difficulties of the low- and lower-income families in paying their monthly home loan payments as major reasons for foreclosures in the city. They said that post-Katrina salaries have not increased to keep pace with the increase in rents.

According to the Data Center, the rise in New Orleans housing costs to unaffordable levels is a clear indicator that the city needs to step up its affordable housing programs.

But the State Bond Commission decided to stop subsidizing affordable construction in the city in September until a comprehensive market study on house rentals and affordable housing is completed.

Considering the situation in the housing industry and the declining average rent price, it is not really surprising that a lot of people are opting to go with rental homes instead of home buying. But sometimes, renters make the mistake of under-calculating the cost.

As a would-be renter, you should also factor in the security deposit on top of the monthly rent. You will also have to set aside money for paying credit check that is usually required by the landlord as well as the move in deposit. Such fees will vary depending on the policies being followed in the building.

Because of such costs, renters are advised to make inquiries regarding these extra fees in order to avoid being surprised. This should be done before you even schedule to see the apartment.

You will find that compared to other properties for rent, rental buildings have set fees and straightforward policies.

For instance, an applicant will have to pay for the application form, usually amounting to $100. The landlord will then make a credit inquiry and employment verification. Once the applicant has been found to be qualified, moving in will be the next step.

On the other hand, renting coops or condos might be more complicated. Application fees can be as high as $1000 and you will still have to consider the other fees that could average for about $150 for every renter.

In addition, there is still the board to consider. A full financial disclosure might be required which means providing bank statements and tax returns. There is also the interview that one must go through. All these things will take up much of your time.

While looking through the properties for rent carefully, asking questions regarding the upfront costs is perhaps the smartest thing to do. You should learn all about the small details, even your rights and responsibilities in order to determine if you can afford the place and be happy living in it.

There are several reasons why many experts are saying this. For starters, there is currently a large inventory of existing as well as foreclosures for sale which could mean that the housing market will have a long way to go before it stabilizes. Building home equity is actually something that looks impossible right now especially with the depressed home prices.

Choosing to live in a rental property instead of investing in a home actually makes a lot of sense for many individuals. It is really more attractive for those who have been considering relocating, retiring or just downsizing.

On the other hand, if you have just started a family, likes a particular neighborhood and employed securely, buying a home might be a better idea — only if you have considered the total ownership costs. After all, you might have trouble recouping the money you will have to shell out for down payment and closing cost as well as property taxes.

There is also the question of home value appreciation. Again, considering the condition of the housing market, there is a huge possibility that you will not enjoy home equity.

If you are still leaning on home ownership, one of the ways you can play it safe is by digging deeper and doing plenty of research on the particular area you are interested in. Check the incidence of foreclosure and home vacancies, mortgage delinquency trends and shortage of housing units.

But keep in mind that even if you do your homework well, the old belief that owning a home is a risk-free investment is no longer true. This has been rebutted when the housing market collapsed under the weight of the mortgage mess and economic recession.

If you do decide on renting houses, you should not be embarrassed especially if you are having financial difficulties. Instead of using your money for buying a home, you can use it to pay off your debt or put it aside for retirement or emergency. In any case, it will give you a chance to recover from any financial problems.

In new apartment buildings in New Jersey, such as the Alexan, a renter can have a one-bedroom unit for just $1,500, with one month of free rent for a 14-month rental contract.

In another rental building, a two-bedroom unit with two bathrooms can be rented for $1,400 a month. The rent includes access to free garage parking, a resort-size pool, a fitness center, game room, a media lounge, a business center and a clubhouse.

Although the commute from some New Jersey areas to Manhattan takes 45 minutes through a shuttle bus and the PATH train, the trade-offs including amenities, comfort and savings are worth it, according to many renters.

Jacqueline Urgo, head of Marketing Directors that lease several New Jersey rental buildings, said that renters nowadays are looking at options available to them and examining values they can get, including opportunities or savings from renting homes instead of buying.

At the Skyline Ridge rental building in Springfield, most apartment units have been leased. The complex offers views of the Manhattan skyline, access to train stations and highways and relatively low consumer prices.

At the 140 Mayhill apartment building, rents are about 50 percent of rates for similar units in Manhattan and about 30 percent below rents of similar units in Hoboken. According to Jonathan Moore of Value Companies which developed Mayhill, his firm is offering one month of free rent for a 14-month rental agreement.

Moore said that his firm started phasing out some of the amenities after more and more renters applied for units. Current renters recommended the building because of its access to the train station, bus stop and major highways.

Among all the amenities offered, free parking is one of the most appreciated by renters who said they were paying a monthly fee of $400 for parking space in their previous rentals. They also appreciate small perks like door-to-door trash collection.

Renting homes has become a better option for many, not only in New Jersey, but also in other parts of the country where rents have sharply dropped and where landlords offer incentives to renters.

In the third quarter of this year, effective rents dropped for the fourth consecutive quarter, the first time it occurred since Reis began monitoring rents in 2008. Effective rent refers to the final amount after incentives such as free one-month rent are deducted.

Victor Calanog, head of research at Reis, also said that in addition to freebies and incentives, landlords have also been lowering their asking rents sharply to entice tenants. They figured that lower income is better than nothing.

According to Calanog, tenants can ask a lot of concessions from landlords. Some landlords are even offering up to 4 months of free rent. Others are offering interior design upgrades, repainting work and free gym memberships. In some cases, if renters ask for assurance that their rents are not going to be raised after their one-year lease contracts expire, they get the pledge.

Based on data from brokerage Marcus & Millichap, the cities offering the most concessions are Atlanta, Denver, Charlotte, Phoenix and Austin.

In Atlanta, landlords are offering an average of 1.5 months free rent; Denver and Charlotte offering 1.4 months; Austin, 1.3 months; Phoenix, 1.2 months; Dallas-Fort Worth and Detroit, 1.1 months; Portland, 1 month; and Orlando and Salt Lake City, offering 0.9 months.

The cities with the weakest home for rental market are Omaha, Memphis and Indianapolis, but these cities are not in the list of cities offering concessions. As vacancy rates increase in these three cities, landlords are advised by analysts to reduce their rents or provide incentives.

According to Calanog, the depressed rents are not likely to reverse their direction in the next several months because of the continued increase in low-priced residential properties and increase in the unemployment rate.

Nonetheless, there are markets which are experiencing increases in rents such as Long Island and Colorado Springs. Both markets showed a 1.6-percent increase in rent in the third quarter.

In the next two quarters, rents are not expected to increase because historically these quarters are slow rental periods, according to Reis analysts. They projected that the rental vacancy rate will increase from the current level of 7.8 percent and surpass 8 percent in the middle of next year.

According to analysts, the home for rental vacancy rate has already surpassed the peak vacancy rate of 7.2 percent in 2004.