Rents Rising Through the Roof
As the COVID-19 pandemic made its way across the U.S., it accelerated what was already a decrease in the inventory of affordable housing in such areas as Detroit, Memphis, St. Louis, and Cleveland. Because of this, many people who were planning on purchasing a home have instead chosen to continue renting. This is excellent news for investors and landlords. If you want to know how rents that are rising through the roof can benefit you as an investor, here are some things to keep in mind as the evolving 2021 real estate market moves forward.
Rental Records Shattered
Within the 50 largest U.S. real estate markets, rental prices reached new highs in almost 90% of them. In fact, the Memphis market posted a year-to-year gain exceeding 23%, while Cleveland, Detroit, and St. Louis all hovered around 10%. Overall, the monthly median rent is now almost $1,600, meaning investors and landlords can enjoy substantial profits due to high demand and low supply of affordable housing.
No Slowdown in Sight
If you are an investor who thinks this good fortune is likely to be a bubble that will burst in the near future, don’t be so sure. According to economists who study the U.S. real estate market, rental prices will continue to increase at their present rates or more, and will not slow down until there is a major shift in the number of homes for sale that are deemed to be affordable for homebuyers, which is not in the foreseeable future. Thus, as an investor or landlord with rental property to offer, you are in the catbird’s seat.
Two-Bedroom Rentals Most Popular
Even though many people have lost jobs and businesses or have experienced other types of financial hardship during the pandemic, this has not resulted in most renters opting for studio apartments or smaller homes. Instead, the opposite holds true. Whether it is apartments or homes, rentals of two-bedroom properties increased at the fastest rate of all, up more than 10% year-to-year. As of June, two-bedroom rentals were going for an average of almost $1,800 per month in certain markets. As of June, the median price for a one-bedroom is $850. The median rent in Memphis overall is $1,210, with occupancy rates at 99%, according to local property managers.
Just as there is a major shortage of single-family homes for sale in Memphis and other areas, there is also a significant shortage of rental properties. Thus, now is the perfect time to take advantage of your turnkey rental company, MartelTurnkey, to supply you with affordable rental property inventory. This is the time to make those real estate investments that you may have put off because of the pandemic. For example, if you are an investor in St. Louis, Cleveland, or Detroit, the historically low number of rental properties on the market will motivate you more than ever to not only purchase turnkey rental properties at good prices, but also ensure your property manager will have no trouble filling those properties with quality tenants.
Rents Rising Faster in Our Investment Markets
Though rents are rising faster than most people’s incomes, this does not mean investors and landlords will have dark days ahead. In fact, even if the nation’s economy recovers somewhat unevenly, you can still see excellent returns on investment in markets where we invest in turnkey rental properties. For example, look at the St. Louis market. As of now, the median cost of rent is $1,188. These rents, which represent increases of anywhere from six to 10% from one year ago, demonstrate the vast potential that exists by capitalizing on current market trends and supply and demand.
If you have been biding your time to invest in properties in Memphis, Cleveland, St. Louis, or Detroit, wait no longer. With people willing to pay more and more for a quality rental to call home, the bubble is not about to burst. Instead, you’ll likely be able to anticipate a tidal wave of reliable profits for years to come. Contact us for more details.
I recently purchased a property from
Martel Turnkey. Antoine and his team are very professional
and knowledgeable in the real estate market. I had a great
buying experience from start to finish. The customer
service and communication were excellent. I would
purchase from Antoine again without hesitation.
~ Sevealyn Raleigh, NC