5 Reasons Investors Still Buy Housing in a Hot Seller's Market
Why real estate investing continues to soar in the United States.
We are half way through 2019. The economic expansion has continued longer than normal and real estate investors are buying more now than ever before.
Let start with the annual increase of households added into the rental pool each year. The simple reason is more people, means increase demand for housing. This begins with simple population growth.
Take a look at the U.S. Population clock, which shows that our population growth grows at an intriguing rate of 1 person every 14 seconds. That number is net, factoring in births, deaths, immigration and migration.
This is an interesting math equation. Okay, 365 days per year with 24 hours in a day equates to 8,760 hours per year. 60 seconds in a minute and 60 minutes in an hour shows us there are 3,600 seconds in an hour. So 8,760 hours times 3,600 seconds are 31,536,000 seconds in a year. So with one net person every 14 seconds ( 31,536,000 / 14 = 2,252,571. That is a population growth of well over 2 million new people per year. Wow!
Statistics show average house size is 3.14 people . Lets round that down to just 3 whole people, since math gets a little fuzzy when you look at these staggering numbers. With 2,252,571 more people living in the U.S each year and an average house size of 3 people we have our number of households formed each year 2,252,571 /3 = 750,857.
So with 750,857 new households formed each year and according to the U.S. census bureau 36% of the population rent that shows a little better than one third of the population rent (750,857 / 3 =250,285)
This is over a quarter of a million (250,285) new rental households formed each year
That was fun, but seriously we have many reasons real estate investing has soared.
· A lucrative business model: The above population growth is just one of many reasons why there is such a huge demand for rentals but indeed rental demand continues to soar. . As with any business, find a need fulfill the need and you will have a lucrative business.
· Investment with the most control: Most investors agree that real estate offers an investor with more controls than any other investment vehicle that exist today. Real estate tends to transition at a slower pace than stocks which can wipe out a portfolio overnight. With real estate you have time to respond to changing markets
· Real Estate is primary or secondary wealth: Seasoned investors want primary and secondary wealth investments that real estate offers. Real estate is a tangible asset that also offers a daily need for everyone, (Housing) and rental housing generates cash flow which.
· Supply and demand: investors are Bullish to markets that are tight as they offer room to expand. Housing markets have been tight and with population growth and stronger demand for housing which put upward pressure on housing supply making housing a very bull market.
Real estate investing as reached an all-time high.
Core logic has some incredible graphs and research that show how demand for rental housing has increased exponentially over the years and how individual investors are capitalizing on this huge potential to both provide a safe haven for their money while fulfilling an ever increasing need.
The fine print: We are not tax advisors or attorneys. Our writings are opinions and should not be used in lieu of advise from such professionals.