The need for rentals in the last decade has increased tremendously. And shockingly, it isn’t just young people who are doing it. It used to be that the majority of individuals in their mid 30s to 70s owned their own homes. And a great number of people in more transitional ages, were prone to renting. Owning a house used to be a huge badge of honor, a coming of age marker, the sign that you were a real grown up. But as time has gone on, this is no longer the case. A vast majority of the US population has chosen to rent instead of buying. And for those of us in the multi-family real estate market, this is excellent news.
Income – Historically, it has always been cheaper to own your home than to rent one. The steep cost of housing has made it so that your rent could easily be twice the amount of a mortgage payment, and because of this, many chose to own their dwelling. However, the problem we have seen most recently is that people can’t afford the down payment on a house. Based on the national average, you need somewhere in the ballpark of $53,000 as a down payment on a home. This is just slightly less than what the average household makes in a year. However, studies have shown that the average household has less than $1,000 in an emergency fund, and more than 80% of the renting population has absolutely nothing to put towards a down payment.
Availability and Pricing – Even with the high demand and low supply markets for residential homes in highly desirable and relocation markets such as Charlotte, NC, the problem can lie in homes that are not properly priced. Due to demans, the number of people trying to move property is astounding, and if you do a quick search on a website where you can buy, sell, or rent property, you’ll soon find that if you require a mortgage, most of the houses you’re interested in don’t appraise enough for you to be approved for the amount the seller is asking for. Be sure to work with a well seasoned realtor and a well knowm real estate company to find the right property for you.
Upkeep – Owning a house is all fine and dandy, until the first big storm of the season hits. Or your water heater dies. Or you get termites. Or you are the only one responsible for all maintenance, upkeep, and utilities. Many are choosing to rent simply for the peace of mind that it is all taken care of. They don’t have to think about the what-ifs and they aren’t tied to a property if it starts going south. They have access to amenities that they are not required to maintain, like a pool, gym, or green areas. The peace of mind is well worth the extra cash that they put into renting over owning.
All of this is good news. It means that the rental trend is here to stay. People are interested in long term rentals, and with that, they are more often than not, committed to being good tenants. If you are interested in investing in multi-family real estate, head to our contact page and leave your info. We are a commercial real estate investment firm, specializing in the acquisition of multifamily properties, specifically submarkets for B and C class assets. These assets give us the gentrification value add opportunity and operational efficiency that provide optimal cash flowing income to our accredited investors. We are true investment professionals who think “long-term”. If you’re interested in joining us, head to our contact page and leave your information. We will get back to you with our investment opportunities!