In an article at fortune.cnn.com titled “Winners of the rental economy,” those who are benefitting from the flight to rental and aversion to buying homes right now include:
--Builders and Developers
Builders are starting to cash in on the higher demand for rental apartments. One estimate is that apartment construction will pick up to at least 160,000 units this year, mostly in urban areas along the East Coast. This is a big increase over the average 90,000 new units constructed each year since 2009.
With an improving job picture for younger workers, apartment demand is increasing, especially when the housing market news is keeping first time home buyers out of the market. Add in of course the people who have lost their homes in foreclosure, and rental demand is up.
--REITs – Real Estate Investment Trusts
Since the financial crisis, REITs have outperformed the S&P 500. In 2010, investments in apartment complexes led gains in the overall REITs market with a total return of 47%, as compared to the 28% overall REIT return, and the 15% S&P500 return.
One REIT, Equity Residential, posted a 2010 3.6% rise in rents and an occupancy rate going up to 95%. Across the board, REITs in the housing rental space are showing increased rents, revenues and occupancy.
--Where are the Individual Investors?
In that article, they’re not even mentioned. However, they’re out there scooping up properties as well. While a REIT makes the news due to the large numbers of properties and dollars involved, individual investors are generating comparable or better returns with little fanfare.
In an article at fortune.cnn.com titled “Winners of the rental economy,” those who are benefitting from the flight to rental and aversion to buying homes right now include:
--Builders and Developers
Builders are starting to cash in on the higher demand for rental apartments. One estimate is that apartment construction will pick up to at least 160,000 units this year, mostly in urban areas along the East Coast. This is a big increase over the average 90,000 new units constructed each year since 2009.
With an improving job picture for younger workers, apartment demand is increasing, especially when the housing market news is keeping first time home buyers out of the market. Add in of course the people who have lost their homes in foreclosure, and rental demand is up.
--REITs – Real Estate Investment Trusts
Since the financial crisis, REITs have outperformed the S&P 500. In 2010, investments in apartment complexes led gains in the overall REITs market with a total return of 47%, as compared to the 28% overall REIT return, and the 15% S&P500 return.
One REIT, Equity Residential, posted a 2010 3.6% rise in rents and an occupancy rate going up to 95%. Across the board, REITs in the housing rental space are showing increased rents, revenues and occupancy.
--Where are the Individual Investors?
In that article, they’re not even mentioned. However, they’re out there scooping up properties as well. While a REIT makes the news due to the large numbers of properties and dollars involved, individual investors are generating comparable or better returns with little fanfare.