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It’s no secret that the coronavirus pandemic has seriously shifted many people’s priorities for what they’d like out of their homes. As Americans quickly adapted to remote work arrangements, the need for home office space – as well as outdoor space – became less of a plus factor and more of a requirement for those looking to leave apartments or condos, and it doesn’t look like the trend will revert back anytime soon.
As home prices continue hitting record highs, the single-family rental market has soared as a result. After all, not all who are looking to leave apartments may be ready to purchase a property. The perfect compromise between owning and living in tight quarters while continuing to save? A single-family rental.
According to CoreLogic, rents for these properties were up 5.3% year over year in April (rising from a 2.4% increase in April 2020) – the largest gain in nearly 15 years. Detached homes, specifically (this excludes townhomes) were up even higher, landing at 7.9% compared with a year ago. As buyers continue to be priced out with soaring sales prices and low housing inventory, the rental market will likely continue to thrive in 2021.
It’s also no surprise that trends are shifting within one particular generation – the millennials. As millennials are hitting their mid-to late-thirties, nearly half of them – as well as 64% of baby boomers –strongly prefer to live in single, stand-alone homes over the alternatives.While the homebuyers market is also being dominated by millennials, the reality is that whether renting or buying, the kids have grown up and their expectations of what home life should look like is moving beyond city limits.
For investors, this could open new real estate possibilities when considering ways to diversify their portfolios. The flipside to fix-and-flip investments is fix-and-hold – that is, buying and rehabbing a property with the intent to rent it out rather than sell. Rental loans give investors the opportunity for cash flow positive projects that will feed into an already high demand market. If done strategically and with a sold foundation in place, rental properties can assist in accumulating wealth and ensuring income flow for a prolonged period of time – as long as investors are willing to wait out and ride through market fluctuations.
Temple View offers competitive rates for rental loans that can be applied to both single-family and townhomes, including financing vacation rentals. If you’re ready to explore ways to expand your real estate portfolio and take advantage of today’s market, contact Temple View today.