With households still trying to bounce back from the economic effects of the recession, families are turning to single-family home rentals, USA Today reported. Single-family home rentals are the ideal middle ground for families hoping to save up for a home while still having enough space for their household compared to a conventional apartment.
Bill and Jennifer Schumacher, who live in in a 1,900-square-foot rental home in New York, said they wanted to avoid living in an apartment.
“We said, ‘There’s no way we’re going into another apartment’ – we need bigger space, we wanted some ground outside,” Jennifer Schumacher told USA Today. “This is a perfect opportunity. It’s kind of perfect.”
As the market grows for single-family home rentals, investments in this segment of the rental market are increasing. Investors hoping to make a splash in the rental market could invest in single-family homes by working with a partner experienced in purchasing and financing these kinds of investments.
Many young families start out in rental homes
With the impact of the recession affecting the availability of homes for many households, young people who are just starting families are likely to begin in a rental home.
In early 2013, the total number of households in the rental housing market reached 43 million, an increase of 35 percent compared to 2012, according to the Joint Center for Housing Studies of Harvard University. The age group driving the surge in rental home demand are consumers in their 30s – the same age range when couples are getting married and settling down with families. The JCHS report found the share in the rental market among households in their 30s rose more than 9 percent over an eight-year period.
“With these widespread increases in the shares opting to rent, the 2000s marked the strongest decade of growth in renter households over the past half-century,” according to the Joint Center for Housing Studies report. “After a modest rise early in the decade, the number of renter households soared after 2005, boosting average annual growth to more than 500,000.”
Because renters are more likely to gravitate toward rental homes before moving forward to homeownership, investors view this segment of the market as an expanding opportunity. The growing adoption of technology among consumers is making it easier for them to connect with investors and manage their investments in rental homes, according to USA Today.