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 cost to rent a home vs. paying a mortgage on an average home in each of the 50 US states. Only Florida had a cheaper mortgage than rent. All 49 other states were better bargains to rent, from a monthly cash flow perspective.
It is important to note that this only compared rent to mortgage. In reality, the cost of home ownership is much higher than just a mortgage, which skews the numbers even more in favor of renting. A homeowner is responsible for all repairs, maintenance, and long term capital projects, whereas a tenant can frequently just make a call to the landlord and say “fix it” (at the landlord’s expense).
It is also worth noting that HowMuch.net’s analysis is primarily based just on those comparative monthly cash flow numbers. In reality, a homeowner can also receive longer term financial advantages of loan principal