There has been increasing demand for rental housing due to multiple factors discussed elsewhere in my blog, including high home ownership costs, demographic shifts, lifestyle preferences, burdens of student and consumer debt.  Supply has not kept up with this demand, especially in the area of affordable housing due to the increasingly high costs of construction (labor and materials), permitting, and land acquisition.  However, income levels for […]

In addition to all of the demographic and societal trends I have previously discussed regarding the demand and appeal of owning rental properties, here is another even more fundamental one: It is both much easier and cheaper to rent a home than to buy a home in the vast majority of all markets across the entire country.

To help illustrate this disparity, HowMuch.net recently determined the average […]

An interesting thing is going on with new or re-purposed rental homes and apartments across the vast majority of markets: They are getting progressively smaller and smaller.  Not only are rents rising, yet on top of that the square footage obtained for median rent is significantly decreasing at the same time.

Importantly, this even takes into account price increases / inflation.  Median rent represents the middle value of all rents on […]

Multi-Family Investments are Proving Strong for the Long Term, Even Maintaining Income Through a Recession

The demographic and lifestyle shifts currently underway across America are startling.  Almost all indicators point to why multi-family investing provides some of the best risk-adjusted returns available.

It is counter-intuitive that more people are renting even though the US economy is in its longest up-cycle and still doing well in most sectors.  That usually favors more people […]

Yardi Matrix released their December 2018 Multifamily National Report.  As usual, it has some tasty morsels for real estate investors to snack on, including:

• RENT GROWTH: National average rents have recently slowed down in terms of growth/appreciation.  Year over year, they have increased 3.2%.  However, that occurred earlier in the year and rent growth has been flat since the summer.  Nonetheless, this can be at least partly attributed to normal […]
  

Attom Data Solutions compiled its 2019 Rental Affordability Report and determined that it is more affordable for people to rent than buy a home in 59% of US counties.  This shows the pent-up  demand for rental homes plus underlying reasons why:

• Home purchase prices have appreciated 6.7% annually recently while rents have increased 3.5%
• Home prices are increasing faster than wages in 80% of the markets
• However, rents are also […]
  

Hotpads.com just completed its estimate of how much United States renters paid for rent in 2018: $504,400,000,000.  That is $12.6 billion more than 2017.  Some interesting stats:

• New York City renters pay more than 10% of the entire country’s total rent ($55.6 billion)
• Seattle metro area rents totalled $9.8 billion and recently grew 4% annually
• Nationwide went appreciation was up 3 percent from a year ago
• The rate of annual […]
  

International commercial brokerage CBRE has recently published its US Real Estate Outlook report for 2019. Here are key takeaways for investors:

• GDP: Similar though slightly lower GDP is anticipated for next year since both business and consumer confidence is currently high and this creates economic momentum into the new year.  This would likely result in continuing interest rate hikes, and inflation from wages and tariffs is another potential issue.
• Office: […]
  

National Real Estate Investor magazine and Real Page Inc summarized recent trends in demand for apartments and apartment living.  The bottom line is that many demographic and financial shifts are increasing interest in apartment living as a sound lifestyle decision across all types of age groups, regions, and backgrounds.

National home ownership rates peaked in 2004 at 69%, and bottomed out at 63.4% in 2015.  In 2018, they […]

CBRE Research recently analyzed US Census Bureau and CBRE Econometric Advisors data to determine that September 2018 saw a 9.3% drop in permits for new multifamily construction. That is a good thing for balancing demand, reducing possible over-supply in the event of an economic downturn, addressing recent slight upticks in vacancy (though occupancy remains very strong in general), and reducing the chance of half-completed shell projects stalling in a […]

The NYU Furman Center released its annual National Rental Housing Landscape report for 2017.  The study focuses on the 53 US metros with over 1 million people, analyzing trends between 2006 to 2015 with a focus on the economic recovery period starting in 2012.  It contains a lot of information, so here is your cheat sheet of key points for residential real estate investors:

• Median rents have grown faster than […]
  

The Motley Fool recently reported how crowdfunding site Realty Mogul commissioned Harris Poll to determine reasons why more people are actively choosing to rent their homes (instead of buy).  Some key takeaways:

• Buying is overwhelming: 71% of Americans feel that the process of buying a home is overwhelming.
• Don’t have down payment cash: Many people are mired in debt, not saving, and/or don’t care to save.  Whatever the reason, they […]
  

National commercial real estate brokerage Marcus & Millichap just released its Research Brief on apartment construction and absorption trends plus the status of millennial generation homeownership and renting profiles.  Here are key takeaways for investors:

• Millennial Demand: Although Millennials have slightly increased their appetite for purchasing homes recently, there are still many reasons that most of them prefer to rent.  This includes lifestyle flexibility, lack of home inventory to purchase, […]