Remember when it seemed like only the elite could rent in New York or LA? Well, Massachusetts cities & towns now have “Distinction” of some of the highest rents in the country, with Boston leading the pack.
This article, https://bostonagentmagazine.com/2024/07/26/massachusetts-rent-is-the-highest-in-the-country/? , highlights some really key findings & breaks down stats to prove the point.
For years, even prior to Covid19, when comparing apples to apples with living area SQFT, # of bedrooms, Lot Size, etc. mortgages cost less than rents around here. Higher mortgage rates pushed a lot of potential home buyers back into the pool of renters. Many renters stayed in their current rentals, so fewer new units were hitting the market. Lower inventory of rental units available & an increased pool of renters jacked up prices.
Tenants aren’t the only victims here. Landlord expenses have skyrocketed too.The sources of increase above were compounded by steep increases in the usual expenses homeowners & Landlords face in taxes, water, electricity, maintenance, repair costs, etc. To add the cherry on top, Covid19 & the resulting shift to work from home initiated a mass exodus from urban environs like Boston, Brockton, Quincy, & the like. All that massive increase in demand(Tenants) for a diminished supply(Rental Units) seriously jacked up MA rental costs for searching tenants.
That’s not bad enough, but with the commission lawsuits settlements affecting the Real Estate market right now, tenants are facing an additional expense. Typically, not always, but typically, in the past, the landlord paid the commision for the tenant’s Realtor as well as his own Realtor. Now, that expense could mostly fall to the tenant. So, in addition to the expense of 1st month’s rent, last month’s rent, & security deposit, many prospective tenants will have to pay their Realtor’s commission fee or go unrepresented. Median monthly rent in Massachusetts is $3,243.00. That means the median tenant will need to come up with $9,729.00 to make the expected first payment(1st,last & security deposit) at lease signing. If they want to be represented by a Realtor, that same average tenant needs to come up with $12,972.00 by the time they sign a lease. This is forcing many to hunker down where they are, resulting in fewer units on the market, further driving up rental costs.
It’s not easy to be a Landlord or a tenant in Massachusetts, but the current market is weighted heavily against the tenant. The best way to prepare yourself, as a tenant, for apartment hunting is to plan, plan, plan. Start saving & plan for spending the equivalent of 4 months rent at lease signing or 3 months if you forgo being represented by a Realtor. Start looking at the units that are on the market months in advance. Get a feel for the market, what’s available, how much it costs & where it is. Suburban & rural units are typically less than urban units. You might find some savings there, but commute costs could become a factor, so always check commute mileage, Commuter rail availability & times, just to be safe. Check your credit. The big three agencies, Transunion, Equifax & Experian are all mandated to offer you a free credit report once a year. You can get that here: https://www.consumer.ftc.gov/articles/0155-free-credit-reports.
I don’t put a lot of stock in Credit Karma. It’s a great tool for teaching you how to manage your credit. It’s lousy for an accurate look at your current status. Compare your actual credit report from one of the big 3 above with your credit Karma report. Notice a difference? That’s why my recommended policy to my landlords is to not accept Credit Karma reports.
Hunting for an apartment should be fun and exciting, full of the prospect of a nice upgrade in your quality of life. In the current market, that takes a lot of research, disciplined planning & sticking to that planning. Many Realtors that represent tenants & those, like me, that represent landlords don’t charge an initial consult fee. Call a few to pick their brains for tips & tricks to navigate the market. We all have a few to share.
Plan ahead, good hunting and have some fun!
Lew McConkey,
Brook Realty, Serving Whitman Hanson & Surrounding Towns
(781)252-9789
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