The last decade has seen enormous growth in the Single-Family Rental market. This is due to many reasons, one of the main being the economic crash of 2008, when the real-estate market collapsed, leaving home-buyers opting for alternative options than large investments. Because of this new demand for rental housing, rent has been increasing steadily, reaching over 3k per month on some housing in New York City, and beyond. But what does this mean for investors? Should you take the risk and chase regional high rents? Or are there smarter options with more opportunity for growth over time?
The CEO of OwnAmerica, Greg Rand, stated, "Increases in rents are benefiting owners of SFR for all the obvious reasons. We see strong activity in many of markets where rents are rising, but some have been touched by the SFR industry. The New York Metro Area is a notable example. Taxes and prices are just too high to produce a decent yield. There is a new wave of SFR investment that is bringing with it a diversity of strategy."
Another investment specialist in the SFR market, Tim Herriage, states that he focuses on economic fundamentals when it comes to decisions on investing. "I have always focused on jobs and schools as the main driver for my investment decisions," he said. "Chasing high rents, without understanding the important underlying fundamentals: leads to poor investment decisions."
Herriage' has sound advice, taking a smart and conservative approach to investment. Follow the long-term growth, invest in places where families will be drawn to -- places like Dallas, Texas, where cost of living is fair and job growth continues to improve.