What Does the Future Hold for Your Rental Property?
Being a rental property owner can be tough. With all the positive news of economic growth, you may be hearing: “Now is the time to sell!” Before you decide, check out what the future may hold for your rental property. As we bring in another year, you may be surprised to see how job growth is actually helping the rental market. Continue reading to see the 2015 rental market trends and predictions based off U.S. Census Data and information compiled by Zillow. We hope this will help ease the decision-making process as you decide if now is the time to sell or rent your property.
– 3 Million New Rental Households Added in 2015:
During the recession, many families doubled up and lived together to
save money. Because of job growth, the children are finally moving out
and getting places of their own. Many are choosing to rent first rather
than buy because of financial limitations or uncertain job security
– Down Payments Are Still Not Attainable for Many:
Rent payments make up 29.5% of an average renter’s income leaving
little to save for a down payment. With stagnant wage growth over the
last few years, many renters are just now paying down other debt.
Even though it is more affordable to buy a house than to rent, renters
still are not set up financially to take advantage of this change.
– Rental Vacancy Rate is at a 20-year Low Nationwide:
Vacancies are currently at 7% nationwide whereas the Midwest and the
South are seeing rental property vacancy rates at 9%.
– National Rent Expected to Rise 3.5%:
In 2014, rent rose 3.3% nationally and grew in all of the 20 largest U.S.
metros. Some markets like San Francisco and Denver saw rent growth
of 15% and 10%, respectively.
– Supply of Rental Properties Will Increase:
200,000 new rental units will be added to the market in 2015. The top
markets with new units will be in Houston, Dallas, D.C., New York City,
and Seattle. Most of this new construction is for apartments but 61% of
renter demand is in the single-family homes category.
– Renter Households Driving Household Formation:
Between 2005-2014, renter households were mainly responsible for new
household formation where once new homeowner households fueled
growth before
– Increased Demand for Lower- to Middle- Income Rentals:
Because rent prices are increasing, people will not be able to afford the
most desirable, upper class rental properties and will be forced to go to
the less desirable, lower class units available.
– Renters are Going Mobile:
Majority of renters are looking for their new place through mobile
searches online. Of Zillow’s online searches, two-thirds came from
mobile devices. They also found a listing with 11-15 photos gets 70%
more views and listings posted on Sunday get 45 more page views.
You can watch the full webinar here.
See these articles and more in this month’s newsletter: Secure Investments Realty March 2015 Newsletter