Home ownership was once an integral part of the American Dream, however, all that is changing as more and more Americans seek rental properties. According to the latest U.S Census, in the past 10 years, California saw an additional 27% of the population move into rental homes, while, 12.5 million families were living in rentals in 2016. Finding the perfect property to suit your needs can be tough, which is why rentals are growing. Therefore, now is the time for property investors and homeowners to consider putting their properties up for rent.
A worthwhile investment
There is a severe housing shortage in America which is pushing prices up to levels which most families simply can’t afford. The number of new homes being built has recently slowed down, too, due to the cost of constructing a single-family home rose by 9.4% last year, according to JCHS. As a result, property investors are simply refusing to sell their homes. Will Jarvis, who became a landlord earlier this year, originally planned to buy his own home, but instead opted to buy a rental property in Atlanta. “I decided to buy a rental property out of state because your money goes further there,” he says. The property cost him $100,000 and he rents it out for $1,050 per month. As he currently only pays $650 a month on his own house payments, his finances are healthy and look prosperous.
Is renting a choice or a necessity?
Statista reports that 64.2% of the population currently own property, a decline of 5% since 2004. More and more individuals are choosing to rent as it gives them the opportunity to live in areas close to good schools and because it allows them to freely move into a bigger home when they require more space. However, other families have no choice but to rent due to being unable to afford their own property as El Segundo renter April Bucknell and her family experienced after moving from Michigan. Their current rental home costs them $3,225 per month and they state they’d require a $800,000 mortgage if they were to buy in the area. Sadly, their high rental expense means they can’t save the down payment required to become property investors themselves.
The American Dream
Property investors up and down the country are reaping the benefits of leasing their properties. Mark Wolf, founder and CEO of AHV Communities states that “People strive to have the American dream, which is a house and one of the ways to find it is through leasing.” The good news is that any existing homeowner can become a landlord, although it’s essential that the property you plan to rent out is in top condition. To achieve this you’ll need to spend some cash, so consider using your savings or if you’re an older homeowner you can release equity from your home via a reverse mortgage.
The number of Americans choosing to rent is rising as property investors cling onto their properties and utilize the growing market. As an investor and a landlord you can make thousands from renting out a high-quality and well looked after home to those who either can’t or don’t wish to become homeowners but yearn for the next best thing.