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Number of Homes for Rent Soars as Economy Sours

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By : John Cutts    99 or more times read
A lot of second homes in Europe, some of them owned by Americans, have been turned into homes for rent by their owners.

Many are in situations similar to a Connecticut couple who has decided to rent out their apartment in the Seine to cover the mortgage.

According to New York- based Jean David Bordonaro who has a rental in a village in Provence, the number of rentals in the village has also gone up from 2 to 20.

Records from a rental US-based website show that home rental listings have increased to 320,000 in 2008, a 25 percent jump from 255,000 in 2007. Many of these homes were initially purchased as vacation homes; 75 percent of their owners said that they did not expect to rent out their properties when they first bought them.

Meanwhile, records of a British-based website, show that 43 percent of homeowners in their listings have decided to rent out their homes to pay for mortgage, maintenance and taxes. 2007 figures show that only 30 percent of homeowners belonged in this category.

Other website figures show that a significant number of property owners have vacation home rentals in order to generate extra income.

One of these website chief executives, Brian Sharples, said that sales rates have dramatically decreased. In the past, about 15 percent of homeowners in their listings were selling their homes annually.

The number of home rentals is also attributed to the worldwide construction boom in the last five years. The period saw homeowners purchasing second homes that they renovated in order to sell. However, as the economy worsened, people became hesitant to purchase property. A weakening dollar also caused monthly home expenses and mortgage to rise. These homeowners then decided to rent out the properties that they cannot afford to own or they cannot sell.

Many developers have now ventured into the rental market. With the number of homes for rent increasing, there is also growing competition in the popular vacation spots.

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