August 05, 2016
Mom-and-pop investors are taking advantage of low mortgage rates and rent growth by throwing their savings into rental properties, and just at a time when Americans are renting more than ever before.
According to Zillow data, the share of single-family homes being used as rental properties is at a 30-year high, and the number of starter homes on the market is down more than 44% from Q1 2012, Bloomberg reports. But that’s not all—the lack of supply for starter homes amidst huge demand is pushing rents up by almost a third.
Yet the real reason more people are becoming landlords is because traditional investments are so weak, CPA Troy Lewis says. “If people felt they could get a reasonable return on money in the traditional way, then these nontraditional ways would have no appeal.” [Bloomberg]