For an area that has more rainy days than sunny ones, things are looking bright on our side of the world. This region is the latest go-to destination for techno hubs and start-ups and is pitted to be the next Silicon Valley. More and more people are moving here as job bases expand and new (or even existing) companies plant their roots in the area. With the inflow of people moving to the area, you would think that home buying would be at an all-time high, wouldn’t you?
Well, the truth is that less people are buying homes. There are fewer homes to buy that are in within the range of singles or new families. Few are interested in purchasing. Most of the people who are interested in purchasing are already buying their second home or are interested in moving to a bigger place. The people with that kind of purchasing power are far and few in between. And that’s not just a trend here but in most areas of the US as well following the trend of increasing mortgage rates. So what’s in store for the future of property management if less people are buying homes?
The answer lies in the rental property market. If you’re an investor, this is where you can make a killing. Over the past couple of years, the rental property market has enjoyed a competitive edge and rental prices have increased quickly, with players enjoying a healthy return on investment. In fact, according to the 2016 US Census, the number of renters has increased by more than 23 million, and that of homeowners by less than 700K. Right now, the growth of renters outpaces the growth homeownership, which has remained virtually unchanged. If you are a landlord or planning on being one, this puts you in a beneficial position.
The rental property market is very closely linked to consumer finances and lifestyle. Some of the key influencers on whether or not a person chooses to rent instead of buy are: financial capability, career paths, and lifestyle trends. How do these things come into play? Take for example a person whose priority is to follow a career path, he would probably choose to rent in order to keep himself open for office transfers or job relocations. Young and upwardly mobile families are also choosing to rent instead of purchasing a single-family home. This is because higher interest on mortgage make potential house buyers do a double take and reconsider making a home purchase.
More people are renting now more than any point in the history of the property market. Plus, there is such a wide diversity in renters. Meaning it is no longer a narrow market and other demographics can be targeted by rental listings.
● Renters aren’t just college students putting themselves through school.
● Renters could be young professionals with three other roommates.
● Renters could be a family whose credit is keeping them from buying their own home.
● Renters could be a retired couple who finds that maintaining a home is getting to be too costly.
● Renters are millennials entering the housing market but not buying houses at the same rate as older generations.
● Renters are baby boomers who are now retired and downsizing.
Here’s why rental homes have the potential to be the next big thing:
Technology for the win
What we have now that we didn’t have then is a host of advanced technological tools and systems that have greatly improved the visibility and accessibility of rental home listings to potential tenants and has greatly improved the ease of marketing and maintenance to homeowners. For example, there are apps that make advertising vacancies easy as pie for homeowners. They need not go the traditional route and publish their listings on print ads and billboards. They can sign up to an app, post their listings, and just pay a fee to promote their property or properties. In addition, once their listings are occupied, homeowners and landlords can easily address maintenance, housekeeping, security, and repairs very easily with a quick phone call, apps, or other online support channels.
On the other hand, tenants can very easily find listings of nearby places or destination areas with the click of a button or through mobile apps. This eliminates the need to commute and see the site for themselves. Potential renters can take a virtual tour of the property without having to take time out and travel which saves a lot of time and money. And if they decide that they like the place, they can just pack up and move in (pending approval of application, of course)
Nowadays, the whole process of renting can be made easier through the use of mobile apps and online platforms. Prospective renters and property owners can complete the entire process of leasing using a standardized process from their mobile devices. This means that both the property owner and the potential renter are verified before they sign any rental contract. What’s more, they do not have to keep repeating this process every time a renter applies for a new home or a property owner verifies a new application.
Another benefit of using a mobile platform is that it reaches a larger audience. This means listings can be viewed from anywhere in the world at any time. This also means that property owners can access a larger audience base with the potential to increase their occupancy rate.
With so many benefits afforded by mobile apps and online platforms, the rental market has so much potential to emerge as the dominant segment in the future of property management. Do you want to tap into this market and explore its income-generating potential? At Davis Property Management, we can give you sound advice about the rental property market. We can help renters find the best value property and property owners get the best placements. We have a wide range of services to fit your need. Call us today.