Rentals as investments?
I came across this article and found it interesting. Thought you might, too!
Is Rental Real Estate the Next Big Opportunity?
It could very well be. Residential rental vacancy rates are below the 10-percent mark, where they had been lodged for most of the past three years. Peggy Alford, president of Rent.com, predicts that by 2012 the vacancy rate will hover at a mere 5 percent.
Since 2002, rental rates have been flat, and down of late (inflation-adjusted). If Rent.com projections are anywhere close to expectations, we could see a rise in rents of 15 percent over the next two years. That would be a significant reversal of fortune: rent hikes have averaged less than 1 percent annually over the past decade, according to Commerce Department statistics.
Pent up demand appears real: More than 1.2 million young adults moved back with their parents from 2005 to 2010, according to John Burns Real Estate Consulting. Many others doubled up together. Now that the recession is over, many of these young people are ready to find new living quarters, mostly as renters. Where there are renters, there must be property owners (even if they are not occupants). As rental rates increase, the capitalized market value of property increases too – that means rising real estate prices.
We've frequently noted that opportunities always abound, regardless of the perceived direness of current circumstances. The outlook in the rentals is another reason we think they abound in the residential real estate market.
Are you interested in finding out more about rental opportunities in Summit County? We have a great tool to help analyze properties for cash flow and return on investment. Give us a call if you'd like to hear more.
Enjoy the spring!
For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field. Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours. Want to know the value of your Summit County property? Visit www.SummitHomeValue.com