TREND ALERT: RENTERS WILLING TO PAY FOR MORE SPACE
With the working from home trend and the red-hot housing market, renters are seeking to accommodate into bigger spaces. RentCafe’s latest survey reveals some interesting stats about the rental market if you’re a current multifamily investor or thinking of becoming one:
- One-third of renters believe they will be working from home either full-time or part-time for the foreseeable future
- About 35% of respondents said they plan to look for an apartment with an extra bedroom to accommodate their work-from-home (WFH) arrangement
- About 60% of renters who currently occupy a studio plan to seek out more space
Those who aren’t working from home may have also jumped on the bandwagon during COVID as deals were plentiful early in the pandemic. This was especially true in the suburbs and certain secondary markets. A move out of a downtown core and into a suburb may have added 10 to 15 minutes onto a commute that was previously walkable, but it may have also resulted in substantially more space.
Developers and investors are taking note of these trends. RentCafe examined apartment size across 92 U.S. cities, about 36% of these cities have apartments under construction that are larger than those built over the past five years. These apartments contain about 50 additional square feet, on average, than what was previously built. This signals some hot rental markets that show no signs of slowing down.
As a real estate investor, this creates an opportunity to increase rents (considering the rent control in your area) due to the high demand in bigger apartments. If you take out the larger-apartment trend, rents rose 9.2% in the first half of 2021, according to Apartment List. Typical rent growth in the first half of any year generally comes in at 2% to 3%, so that’s a big deal.
With the expiration of the eviction moratorium, landlords can now begin procedures to reclaim their properties. Once they do, they will be entering a hot rental market. Most will find they can charge significantly more for their units than pre-COVID.
If you’ve thought about expanding your real estate portfolio, this is a great time to discuss market trends with some experts in your area. With historically low rates, FBF can walk you through a wide range of options that will meet your short- and long-term financial goals. We offer competitive rates, flexible terms and go out of our way to make the process easy on you.
Call today and take your real estate portfolio to the next level!
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