The Case for Investing in Low-Middle Income Rentals

Since the collapse in the housing market almost 10 years ago, we’ve seen a steady increase in the demand for rental properties. Here are some startling facts:

  • In this time frame, the number of rental units has soared from 34 million to 43 million, in 2015. By 2025, it’s expected to top 46 million.
  • The largest percent of that growth — 80%! — has come from the conversion of single family homes into rental properties.
  • Demand has grown in all income ranges, but particularly in households earning less than $100,000/year.
  • Because of the rising demand, rents are going up, while incomes are not keeping up. Renters are spending a larger percentage of their take-home pay toward their rent payments than ever before. But even so, we’re expecting continued growth in our rental markets throughout the US.

With no end in sight for the continuing demand on rental properties, investors are diversifying their portfolios and putting their monies in real estate. Indianapolis is a very desirable rental market; our economy is growing, yet our prices are reasonable compared to the rest of the country.  We have investors from all over the world who’ve decided this is the place to be … especially in the low/middle income markets, there are still great returns to be made.

Onward and upward!

 

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One thought on “The Case for Investing in Low-Middle Income Rentals

  1. I totally agree …

    In talking to prospective landlords, they often think that buying a high-priced house in an upscale neighborhood is the way to go. After all, wealthier people make the best tenants … right? Not necessarily.

    Tenants who are paying $2,500 a month or more can be just as destructive as those paying $900. A bad one will kick holes in walls, destroy carpeting, and stick you with back rent … regardless of how much they’re paying.

    My best experiences came from single-family houses and duplexes in what you might call middle-to-lower blue collar neighborhoods. These are usually hard-working people who have jobs but can’t afford to buy a place of their own.

    George Lambert
    Author, What You Must Know BEFORE Becoming a Greedy Landlord. How to build a portfolio of investment properties for an income that lasts a lifetime.

    Like

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