I have been looking into rentals of two bedroom apartments so I won’t have the headaches of maintaining a house. One thing that surprises me are the current costs to rent a nice one which are between $4,000 t and $8,000 a month
Why do you think they are so expensive. Is it due to inflation or that so many rentals have converted to condos that there is a shortage of rentals
Inflation is a factor but really it’s about demand. If people wouldn’t pay $4,000 a month, rents would drop to $3500. If people wouldn’t pay that, they’d drop more, etc. People have jobs and the money to spend, free market forces at work.
There are several factors including location, amenities, taxes, etc. When we helped apartment hunt with my son last year in Madison Wisconsin, a one bedroom in the hood was around $1,000 a month and very nice luxury apartments were over $2,500. He found a very nice 2 year old apartment with an attached garage, clubhouse, pool, granite countertops, stainless steel appliances and quality cabinets. It’s around 800 sqft and is $1,500 a month.
Supply and demand. In 1991 my first house cost $92,000. Today it is valued at $444,000. If you use the inflation rate over that time frame, from 1991 to 2024, including the family killing inflation of 2021-2022, it should be worth $212,500. So that difference is over and above the inflation rate by $231,500. That’s a lot of demand