As we have been seeing much progress, growth, and strength in the real estate market and sales of properties in recent months, the rental market has been very strong as well. Due to this strength, large institutional investors assert that single-family rental homes have proven to be one of their most valuable assets, and assets that they are holding on tightly to.
Many investors ended up buying rental properties when the housing crisis occurred. They purchased the foreclosed single-family homes to turn them into rentals. Even now, many years later and in a completely changed economy and real estate market, they see much potential for the rental properties.
“Prospects for the single-family rental market through the remainder of the decade are good,” says Mark Zandi, chief economist of Moody’s Analytics, in a recent study. “Rent growth is expected to accelerate this year and average nearly 3 percent per annum though the end of the decade.” This optimism for the rental market encourages investors to continue to hold onto their rental properties.
Since 2006, there have been large growths in the ownership share of single-family rental homes. This has risen from 11.2 million to 15.1 million in the last nine years, showing a 35% increase, according to John Burns Real Estate Consulting. About 3.9 million homes converted from owner-occupied to rental homes since 2006, as compared to 2.9 million new apartment units.
“While we expect the rate of single-family rental growth to slow as foreclosures slow, we believe the professional operators have a huge opportunity to build an investment-quality income stream out of what used to primarily be a mom and pop business,” says David Guarino, senior research analyst at John Burns Real Estate Consulting.
The rental industry is one with much opportunity right now, and if you are interested in partaking by purchasing your own home, or by renting, search for properties through the RE/MAX Paradise website for all of the amazing properties we have to offer!