Roommate Effect: Good News for Real Estate Investors

Are you an investor or rental property owner that is worried about the future of your rentals? The good news is: you shouldn’t be.

According to the Census Bureau, homeownership rates were reported at 64 percent at the end of 2014, which is a 20 year low for Americans, and a 1.2% drop from the 2013 year end report data. The good news for rental property owners is that vacancy rates are dropping as well, proving the demand for rental units is still there. In fact, Zillow reported that the average rent rate is on the rise. Combine that with the fact that the US had over 700,000 new renters in 2014 alone, and you can see a lucrative market for rental property owners.

 

3 Factors Combined Lead to “Roommate Effect”

High debts, high rent rates, and low incomes have come together to create “the roommate effect.” Zillow also studied how the “roommate effect” will impact the rental market. Just like on popular sitcoms “The Golden Girls,” of “Friends,” or even “How I Met Your Mother,” adults today are doubling up in rental homes as a way to save money. In 2012, the number of American renters living with roommates or family members was over ⅓ of the adult population.

According to Stan Humphries, Chief Economist for Zillow.com, “All of these doubled-up household represent tremendous potential energy for the market. If an when these compressed households begin to unwind and these millions of Americans do start to create their own households, demand will bounce back, possibly even causing household growth to outpace population growth.”

 

A Growing Market

As studies show the rental market is stable and will be for some time, now is a good time for investing in real estate. As the leader of property management companies DFW has to offer, Real Property Management is here to help you as you grow your portfolio. Our overall goal as a company is to save property owners the time, money and headache often associated with rental property. We offer solutions for every aspect of property management, and are experts on the local DFW metroplex. As you continue to grow your portfolio, lean on our professional DFW property managers to guide you along the way.

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