How to Profit from the Booming Residential Rental Market

May we let you in on a little secret that a small group of accredited investors is quietly using to generate market-beating returns in real estate that you won’t learn by watching HTGV?

It’s not buying and renting single family homes. It’s not renovating and flipping homes, which is a lot of risk and a lot of work.

Rather, it’s investing in multi-family communities -developments that consist of apartments, townhouses, or detached homes which house multiple families within the community.

Why is now the ideal time to diversify your portfolio into multifamily rental communities?

Because, according to a recent article in the New York Times, renting has regained its popularity as the preferred method of housing.{1}

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Consider the facts:

  • Over the last 8 years, the home ownership rate in the U.S. has fallen from 69% in 2004 to below 64% today.
  • From 2004 to 2014, the number of new rental households has increased by 770,000 annually, making that period the strongest 10-year stretch of rental growth since the late 1980’s.
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Since 2014, home ownership as shown in this graph has sharply declined, making renting the only available housing options for millions of Americans.

Why the rental market is booming

A number of economic factors have contributed to the decline in home buying and subsequent increase in renting:

In 2015 there were over a million foreclosures in the U.S.{2} Former homeowners who have lost their houses to foreclosures find that many lenders will no longer give them a mortgage because of their low credit scores.

Lenders have tightened credit standards in the wake of the subprime mortgage crisis, making it difficult for many consumers with even decent credit scores to qualify for loans at affordable rates.

Between inflation and the rising cost of single-family houses, numerous families – including many with good jobs and salaries — cannot raise the 10% to 20% down payment the mortgage lenders require. On a $250,000 home, a 20% down payment is $50,000.

Government programs to help Americans reduce mortgage costs are not widely publicized, with the possible exception of HARP -and the HARP program expires at the end of 2016.{3}

The bottom line: Millions of Americans, even those with well-paying jobs, cannot afford the down payment or secure the mortgage needed to buy a home.

As a result, aside from moving in with their parents, renting is their only option. Which means owners of multifamily communities have both high occupancy rates, can charge higher rents, and enjoy great cash flow.

To find out how Diversified Real Estate Property LLC can help you profit from the new boom in multifamily community rental properties, with a self-directed IRA, click here now.

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