- The residential rental market is worth $3 trillion and growing.
- Affordability and flexibility make renting an appealing alternative for many.
- Niche rental properties catering to specific needs are in high demand.
- The growth of the remote workforce increases demand for rental properties with amenities.
- The housing shortage, economic uncertainty leads people to rent rather than buy a home.
The residential rental market has been booming in recent years and has seen a new surge in demand in this COVID-19 era. Property management companies and landlords nationwide are seeing a significant increase in rental applications and demand for rental properties more than ever. The reasons for the continued growth in the residential rental market are multifaceted, but some key factors contribute to this trend. Here’s a short look into the market, why it’s booming, and easy ways to join it.
The Residental Rental Market
The residential rental market is currently worth $3 trillion. More people in the U.S. are renting than ever, with rental units accounting for more than 34% of the total housing stock. With a population of roughly 329 million, this presents a massive opportunity for landlords and property management companies to take advantage of the enormous market potential.
Reasons for Booming Market
There are many reasons why the market is booming right now. Here are some of them:
Affordability and Flexibility
One of the main reasons why the residential rental market is booming is due to affordability and flexibility. Homeownership costs continue to rise, and many people find it increasingly difficult to buy a home. This makes renting a more appealing alternative, as it’s more affordable in the short term and gives people more flexibility without the long-term commitment. Millennials, in particular, are not as interested in owning homes as previous generations and prefer renting as a lifestyle choice.
Increased Demand for Niche Rental Properties
With a shift in lifestyle needs, more people seek out niche rental properties catering to their specific needs. For example, pet-friendly rentals, serviced apartments, and luxury rentals are popular niches within the rental market. As people’s lifestyle needs change with the rise of remote working, they are looking for rental properties to accommodate their new lifestyle choices.
Growth of the Remote Workforce
The rise of the remote workforce has increased demand for rental properties. People are no longer tethered to a specific location for their work, driving demand for rental properties with specific amenities like high-speed internet, office space, and amenities such as a gym or pool. The flexibility to live and work from anywhere is one of the drivers behind the growth of the rental market, particularly in city centers.
Currently, there’s an ongoing housing shortage in many cities and towns. This has caused rental prices to rise as demand outstrips supply, leading to a higher demand for rental properties.
Uncertainty in the Economy
Finally, economic uncertainty leads people to rent rather than buy a home. People are cautious about making long-term financial commitments in the current economic climate and therefore opting to rent instead. This ensures they can have flexibility in their housing needs, such as the ability to move if their financial situation changes.
How to Join The Market
Now that you know the reasons behind the booming residential rental market, here are four ways to join it.
Educate Yourself on Rental Property Management
Before you enter the rental property market, get educated on all aspects of rental property management. This includes understanding local and state laws, tenant screening processes, and other essential skills for successful rental property management.
Get the Right Tools and Software
Invest in the right tools and software to manage your rental properties. This includes property management software to help keep track of tenant information, rent payments, and maintenance requests. Other necessary tools may include marketing materials such as a website or social media presence, accounting software, and other digital tools to streamline operations.
Find Financing for Investment Properties
Find financing options for investment properties with banks or other financial institutions. You need capital to purchase an investment property, and having the right financing can make it easier to find and purchase profitable rental properties.
Look Into Professional Services
It’s essential to get help when you start investing in multiple properties. Consider looking into professional property managers if you don’t have the time or expertise to manage your properties. They can help take the burden of managing rental properties off your hands so you can focus on finding and investing in new rental opportunities.
The residential rental market is booming, and landlords and property management companies have plenty of opportunities to capitalize on it. With the right knowledge, tools, financing, and professional services, anyone can join this growing market and monetize their investments. So don’t wait any longer – get started today!