In a recent market analysis for property managers, Real Property Management predicts a bright second quarter for rental property owners. The company analyzed data from 14 known impactors on the real estate rental property market, and produced an “economic snapshot for landlords.”
The biggest trends that led to the prediction for a bright future include:
- Vacancy rates at rental properties declining as homeownership continues to decline and the job market continues to improve
- Generation Rent enters the scene: Millennials are beginning to move out of their parents homes, but the majority move into rentals. Low mortgage rates that may be attractive to first time homebuyers are offset by higher home prices in an uncertain economy.
- The “roommate effect” where adults are doubled up due to high debt, high rent rates and low income will gradually wear off as the job market continues to improve. This leads to the formation of new households, most likely in rental units.
- Rising rent rates will occur due to the decreased vacancy rates in rental properties and the job market improving.
As all of these factors work together to predict a bright future for property managers, there are a few cautions that should be taken notice of as well. Over the years, many investors have become accustomed to purchasing foreclosed homes at amazing prices, fixing what repairs are needed and renting them out to cover the mortgage-and then some. In February of 2015, CoreLogic reported 553,000 nationwide foreclosures on the market compared to 761,000 a year prior.
Real Property Management is providing these snapshots on a quarterly basis as a way to bring all relevant information about the industry to the attention of property managers. For more of quarter 2 snapshot for 2015, visit: http://www.realpropertymgt.com/2015-rental-market-analysis-for-landlords-second-quarter