Owning a single-family South End rental property can be a challenging, exciting, and profitable way of building wealth. But you can only be good at building wealth if you really understand the rental real estate market. Information is a very powerful tool for a rental property investor. To get you started, here are four important facts about the 2022 rental real estate market.
1. The national average rent increased by 36% in the last ten years.
According to statistics, the national average rent in the U.S. has grown to 36% in the last decade. These increases can be connected to various factors ranging from a change in renter demographics to a growing job market. In fact, the national demand for rental homes and the number of renters has ballooned two times faster than the number of renters. This increase has shifted twenty U.S. cities from a homeowner majority to a renter majority in the last ten years. These data indicate a significant lifestyle change for many Americans.
2. Rental properties appreciated an average of 5.2% every year over the last ten years.
The increase in housing prices in the last few years has led to rapid increases in property values in many markets around the country. On a national level, property values went up at an average rate of 5.25% each year in the last decade. According to some metrics, 2021 saw the highest appreciation in home values on record – an average of 14.5%. Data like these confirm that recession years do not automatically mean falling property values.
3. More people than ever are renting instead of buying.
After more than ten years of sustained growth, the U.S. now has a renter population of over 100 million strong. Between 2010 and 2018 alone, the number of renters increased by more than 9 million people! Comparatively, only a little over 8 million people became new homeowners in the same period. Around 34% of the general population are currently renting their homes. This is the largest share of renters the U.S. has had since the 1960s.
4. As demand for rental homes increases, supply falls behind.
The number of renter-occupied housing units in the United States has barely increased over the last decade. For a nation with just under 44 million renters, there are only about 43 million rental homes. Therefore, the demand for rental homes continues to outpace availability, and residential vacancy rates remain very low in most markets across the country. This high demand is driving competition among both renters and rental rates.
Based on these facts, this is the best time to invest in the rental real estate market. And Real Property Management Commonwealth can help! Our expert team of South End property managers works with investors to help find quality rental properties, assess the local market, and provide comprehensive property management services. Contact us at 617-299-2342 to learn more.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.