U.S. Rental Market Continues to Grow
According to a recent study by Attom Data, renting is currently a better financial option for most consumers than buying a home. But while the idea of purchasing a home may seem counterintuitive if you look at the present data, it's actually the perfect time for investors to purchase rental properties. Why? Because all of those people who choose to rent, rather than buy in the current market, need somewhere to live.
What Does This Mean For Investors?
The Department of Numbers shows that rental property in Indianapolis experienced an increase in median gross rent of 5.73% over the past three years alone. As the growing economy continues to recover from the last recession, Indianapolis is seeing an increase in job availability and growing demand in affordable housing for young professionals and families. Furthermore, according to the U.S. Census Bureau, in 2017, homeownership plunged to its lowest rate since 1965 and currently sits at just 62.9%. But what does this mean for investors and landlords? It's great news actually — because a nation of renters creates more investment opportunities for landlords.
How Is This Changing the Rental Market?
Consumers are increasingly opting for the flexibility of renting, especially in bustling metropolitan cities, so much so that new construction builders are now catering to the build-for-rent market. Last year alone saw approximately 43,000 single-family homes built to rent out, with the built-for-rent housing market currently at almost double what it was in 2012. The single-family home rental market is currently so attractive to investors that homebuilders such as Lennar and Toll Brothers are building homes specifically with this in mind.
Single-Family Rental Investment In Indianapolis
But it's not only millennials and families that are opting for rental properties over buying their own home, Baby Boomers and empty-nester, who no longer want to deal with owning a home, are also turning to rental properties. In fact, the single-family rental market is currently so strong, particularly in metro areas with sustainable growth prospects, 90% of Forbes marketplace live buyers are located over 250 miles away from their investment property. Indianapolis's affordable housing market, in particular, was ranked by Forbes as one of the top-ten "secondary" investment property markets, due to a 12.8% increase in single-family rental home appreciation, as well as an average rent growth of 4.1% last year alone.
With rental property demand increasing year on year, it's never been a better time to invest in Indy. If you're considering being a single-family landlord in the Indianapolis area, click here to discuss your options with us — and also check out our podcast for general financial advice and useful tidbits.
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