A Paradigm Shift in Rental Demographics
According to a report issued by Harvard’s Joint Center for Housing Studies, the era of the broke 20 year old renter are gone. In their place, we are seeing individuals with more net worth (but not enough to purchase a home) of all age ranges, many with families, shacking up in rental units. Indeed, many renters now qualify as “high income households,” which is defined as a combined income of $75,000 per year (this bar seems awfully low, since two minimum wage jobs will get you there). Notably, most of these renters have college educations (so it seems “high income household” does not account for net worth). What’s truly notable about this report, is that there are more people raising families in rental units than there are people raising families in a home (29% to 26% respectively).
This change could be explained by the increased number of people carrying significant debt from higher education. The net result is a group of people with higher incomes, but insufficient savings to make a down payment on a house. As such, a niche market of luxury apartments have sprung up around a demographic of people with high disposable income, but not enough to purchase a home.
With that groundwork set up, it may be prudent for those property owners who are viewing their property as an investment to consider jumping in on that market. Apartments come with a bevy of issues that a home doesn’t. Moreover, you can justify charging a premium rate for renting your property. Finally, given that the demographic you are looking for is comprised of young professionals, there should be very little concern that they will trash your property. In sum, it might be a good idea to convert one of your properties into a rental to cash in on this growing trend.
At the Chernov Team we understand that knowledge is power, and knowledge of how the market is behaving is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.