Higher Prices for US Rental Homes Make It a Good Time for Investments

The median monthly rent for single-family homes in the U.S. rose higher than apartments in 2016, as rentals for homes grew 1.3% annually to $1,404.

Apartment rents increased only 0.5% over the past year to a monthly payment of $1,551. The amount may be higher than single-family homes, but demand for the latter has been increasing since the housing bubble in 2008.

Rental growth

Property owners should consider investing in Section 8 housing with the assistance of real estate investment companies such as Americas Housing Alliance, LLC amid the high rental growth and demand for single-family units. A limited supply of properties for rent also causes more expensive prices, which also means that landlords have the flexibility of increasing rental rates due to the high demand and low supply.

In 2016, nearly 20% of single-family homes nationwide have been rented out compared to 13.5% in 2006. The increase partly stems from many renters who are unable to acquire homes due to high prices and insufficient money. For instance, a household will need to pay more than two-thirds of the median income to cover a 20% down payment on an average house. The price could amount up to 180% of the median household income in more expensive markets such as Los Angeles.

Buy vs. rent

An unexpected drop in home sales in August 2017 also partially reflected the lack of supply for available homes. Hurricanes Harvey and Irma could have affected the pace of homes sales for the month as well, according to the Commerce Department.

These factors indicate a slowdown in the housing market, so it could be a good time for now to seek rental investment properties. The department said that new home sales only reached a seasonally adjusted annual rate of 560,000 units, down 3.4%.

Rental properties provide you with a steady income with regular monthly payments, depending on the terms of your leasing arrangement. However, take note that rental properties require routine maintenance as opposed to selling a single-family unit.