What factors drive high demand for single-family rentals in 2023

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A new wave of individuals prefer renting over purchasing homes. From our surveys, representing approximately 50% of households with children in the United States, are more inclined toward renting rather than homeownership, contrasting with earlier generations.

Before delving into the specifics of why investing in single-family rentals (SFRs) might be a lucrative choice, let’s briefly clarify the concept of single-family rentals and highlight how they distinguish themselves from other property types.

What constitutes the single-family rentals dwelling?

Single-family residences represent a distinctive category within the real estate sector. Typically located in suburban areas, these properties are standalone structures, commonly featuring a yard and a garage

An example of the single-family rentals property
An example of the single-family rentals property

Allocate a greater amount of capital than you currently possess

A prevalent investment strategy in which the investor utilizes borrowed funds to amplify their potential returns
A prevalent investment strategy in which the investor utilizes borrowed funds to amplify their potential returns

An investment option with lower volatility 

The average annual returns from single-family rentals closely mirrored those of stocks and bonds
The average annual returns from single-family rentals closely mirrored those of stocks and bonds

Why the single-family rental properties offer a greater level of investment security?

1. Tangible properties

The value of land tends to appreciate over time because it is a finite resource
The value of land tends to appreciate over time because it is a finite resource

2. Reduced Volatility

Housing markets are less influenced by nationwide economic factors
Housing markets are less influenced by nationwide economic factors

3. Steady Income

Single-family rental properties not only increase in value but also offer a consistent monthly income from rent
Single-family rental properties not only increase in value but also offer a consistent monthly income from rent

4. Inflation-Resistant

The median selling prices of homes are rising more rapidly than the rate of inflation
The median selling prices of homes are rising more rapidly than the rate of inflation

Possible supplementary income source

Lease agreements mandate that tenants are responsible for lawn care and reasonable home maintenance
Lease agreements mandate that tenants are responsible for lawn care and reasonable home maintenance

Conclusion

That’s alll about the key factors drive high demand for single-family rentals this year. Lastly, remember to share this article with your friends and relatives.

 

 

 

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