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Will the Consumer Benefit from a Rent Economy?

Come and take a look around. This world runs on a rental basis. Even your precious life has been borrowed from a part of that whole divine life force. From time to time, you have to pay a rent, or in common parlance, you have to work to prove your worth and to establish the fact that your existence is worth sustaining. If a commodity as your life is available on a hire basis, why shouldn't be true for house properties and real estate??

Welcome to the latest economic strategy of mankind. Buying houses has fallen out of fashion. Renting is the rage of the season. But don't be mislead to believe that this is just a passing trend. Consumers have realized a basic truth-rather than investing a huge sum of money in a medium standard abode; they'd be able to enjoy the benefits of a luxurious one on a rental basis. Coupled with this is the fear of fluctuating property values. IF a person buys an expensive house today, ten years from now he would expect to sell this property at such a price to raise the entire cost as well the entire mortgage. But with the ever-changing trends of estate market, one can't be too sure. Who knows that later that person might realize that his entire investment had been one foolish miscalculation.

There are other problems too that have compelled the customers to refrain to renting rather than buying. Most of us will remember the devastating hurricane Katrina that destroyed a large number of houses and rendered millions homeless. What was a shocking revelation that most of these houses were without any insurance cover. Later when these people tried to rehabilitate themselves, they realized that it was better to depend on rent properties, so that if such a catastrophe occurred again they won't have much to regret about.

How does this rent economy survive? There some homeowners who are waiting for the market to stabilize before they sell off their properties-either because they want to move out and take up residence in a better place or they can't afford it anymore. So instead of selling it off at the drop of a hat, they have decided to take the wiser route of renting out portions of their homes. This will ensure a quicker profit as well as a hope for a better future.

This economy has its dark side too. There are some investors who can't afford to wait and collect the rent as well as mortgage value of their houses over a long period time. So they run a loss, by lowering the rents they may even have a small amount of cash at hand. Actually a several month wait can lead to a worsening of situation, where the property value will fall so much that its resale value would be extremely nominal. So to reach a clear cut solution, landowners have had to adopt this alternate strategy.

But despite all these downfalls, the rent economy is here to stay.