The last decades economic downfall, as well as the Real Estate Bubble, has spawned a new desire for Single Family rental homes. Indeed, this has created a different economic and demographic shift affecting the American Housing Market.
The commonality of the past 10 years (single family rentals)
What these people all have in common is that most of them were low to median income families. They have been living in a single family home and the last thing they wanted to do is get stuck living in a small crowded apartment.
Small rental houses was the perfect answer for millions of Americans.
Investors saw opportunity and bought houses
As all entrepreneurs know, “Find a need, fulfill the need and you have a great business!” Many Mom and Pop investors have been investing in houses for years. They knew how safe and sustainable single family investments were.
But Big Brother is watching. Yes, the institutional investors saw how lucrative buying houses could be. They could buy, rent do a little fix up and then sell as the buyers came back. SURPRISE, the initial objective of buying and selling for a large profit a year or two later did not make as much sense as the safety and sustainability that these investments were providing so they were eager to hold them for sustainability.
Where are the Boomerang Buyers?
To many experts, surprise, the so called Boomerang buyers (those whose financial challenges have seasoned and are now able to get financing for a home again) did not come out of hiding as swiftly or in large numbers as expected. It appears these tenants have made peace with the idea of renting. They found comfort in not being tied to mortgages.
A Look into the Single Family rental market
According to the Census Bureau, there are roughly 80 million Single Family attached and detached homes which are rental homes and that number continues to grow. The tenants for these Single Family rentals are mostly lower and middle income families and the typical make up is 2 adults, 2 children and a dog. Yes, these are families with pets so you may want to accept pets into your rental homes if you wish to rent to families who are tenants that tend to stay in their rentals for a longer period of time.
There are another 30 million rental units positioned within Multi-Family buildings and these are comprised of non-family and individuals who do not require so much space or simply find these to be more affordable rentals. Often these renters tend to be more transient.
As the Demographics change in our new society, single family homes appear to be a favored place to rent and as renting is becoming the new norm for better than 30% (and growing) of the population Single Family rentals are rapidly becoming the new norm.