Having single-family Indianapolis rental properties are challenging, exciting, and profitable ways to build your wealth. But your wealth can only grow in proportion to the extent that you understand the rental real estate market. Information is a very powerful tool for a rental property investor. To start, here are four key facts you need to know about the 2022 rental estate market.
1. The national average rent increased by 36% in the last ten years.
According to statistics, the national average rent in the U.S. has grown to 36% in the last decade. Various factors have brought about this increase– from shifts in renter demographics to a booming job market. In fact, the national demand for rental homes and the number of renters has ballooned two times faster than the number of renters. There are twenty U.S. cities that have shifted from being a homeowner majority to a renter majority in just the last ten years. These show us that there is a significant lifestyle change for many Americans.
2. Rental properties appreciated an average of 5.2% every year over the last ten years.
There has also been a huge increase in housing prices in the last few years, leading to a rapid rise in property values in markets all over the country. On a national level, property values went up at an average rate of 5.25% each year in the last decade. According to some metrics, 2021 saw the highest appreciation in home values on record – an average of 14.5%. This just goes to show that recession years do not always result in falling property values.
3. More people than ever are renting instead of buying.
With the decade-long sustained growth, the renter population in the U.S. is now over 100 million. The number of renters has grown by more than 9 million people between 2010 and 2018. In the same period, there were only just over 8 million new homeowners. Currently, about 34% of the general population are renting their homes, making this the largest share of renters the U.S. has seen since the 1960s.
4. As demand for rental homes increases, supply falls behind.
The number of renter-occupied housing units in the United States has barely increased over the last decade. For a nation with just under 44 million renters, there are only about 43 million rental homes. It is, therefore, not surprising that the demand for rental homes is greater than the availability, and residential vacancy rates are very low in a lot of markets across the country. This strong demand drives competition among both renters and rental rates.
Given these facts, you can see that there has never been a better time to invest in the rental real estate market. And Real Property Management Indianapolis Metro can help! Our expert team of Indianapolis property managers works with investors to help find quality rental properties, assess the local market, and provide comprehensive property management services. Contact us at 317-484-8444 to learn more.
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