Landlords have been starved for good news lately. With abundant supply and reduced demand over the past several years causing declining rents (not to mention increased taxes and insurance), its about time for a turn around in fortunes for these investors.
An article at RISMedia.com spells out the case for double digit rent increases over the next several years. The article points to the fact that household formation is way below what it should be. Young people have been living with parents, sharing with roommates or staying in college dormitories, and this pent up demand is expected to hit a new construction market that has dropped well below what will be needed to keep up with this demand.
In our market, we have seen a definite tightening of the rental market for the past year. Where we were seeing rent declines and longer vacancy periods, we have once again begun increasing rental rates on renewals and new vacancies. Our average Days on Market has dropped to under 25 days!
This is great news for landlords who have been holding on by the skin of their teeth over the past 5 years. And with property values still at significant retraction, and interest rates hovering below 5%, could there be a better time to add to your portfolio?
Link to Article at RISMedia.com: http://rismedia.com/2011-01-16/rent-increases-on-the-way-say-analysts/