Today’s economic climate is resulting in a boom of some sort in the housing market – a boom in renting. Some cities are predicted to see a 25% increase in rental growth in the coming few years. According to John Burns of John Burns Real Estate Consulting, there are 3.4 million units of pent up demand for rental housing strengthened by young adults who either live at home or are rooming with a friend to save money. But it’s not only young adults. Thanks to high unemployment rates, even older adults are seeing the appeal in renting as a “safer” option to home ownership. Another factor leading to a rise in rentals? Government policy. This year will be another uncertain year for housing, mainly because decision makers in Washington DC still influence the real estate industry, claims Lisa Marquis Jackson, VP of John Burns, Inc. This will mean higher rental and occupancy rates and a start to new construction. Eventually this will level out, rental rates will cap and homeownership will once again creep back into people’s minds. Long-term affordability will also eventually become a factor, as renters realize it’s not the best move for them to rent for the long term. In the meantime, renting is a very attractive alternative for many, and owning rental property is a savvy move for the well-informed real estate investor.
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