OfflineA Harvard University study just released had some interesting statistics about renters. The number of renters who spend more than half their income on rent is at its highest level in 50 years.
10.1 million people, about 26% of renters, spent more than half their pre-tax income on rental housing in 2009. With most experts recommending that you not spend more than 30% of income, this is a significant number and it isn’t likely to drop in the near to intermediate future.
Vacancies are low, and the number of renters continues to increase. From 2007 through 2009, the number of renters increased by 8%. As foreclosures continue, more renters are being created. The supply-demand situation for rental housing is skewing in favor of landlords, and this is expected to continue for some time, especially when new home construction and multi-family construction are both down nationally.
Articles in the media in most areas of the country are telling us that rents are rising, even in hard hit areas like Florida. After all, banks don’t rent foreclosures out, so those empty homes aren’t helping to fill any demand. It’s up to investors right now to create more lower priced rental units, and they’re stepping up. It’s not altruism though. It’s all about profits, and there are bargains out there that will rent for excellent positive cash flow, even after rehab.
More importantly, dgadmin2 is correct on showing that more of renter's income is now devoted to rent. This is caused by the high unemployment across the country and the number of people losing their homes. They have to live somewhere and they have chosen to rent; not to get in the housing market again as they do not see the American Dream as they once did.
Just be careful out there as generally speaking, we are still headed south in this market.
Always Looking to Acquire Houses | Always Looking to Amaze Investors