One of the popular directions in the modern real estate business is property management. A good deal of money earned by real estate agents is received from finding residents for landlords. This business is very popular today since, only in the US, there are over 23 million landlords who rent out their apartments and homes and get profit.
At the same time, not every person or family can afford to buy an apartment and home so there is a great demand for rental housing too. It is enough to remember students who move for studying, young specialists who have just graduated and started working, military men who have to move regularly and many other people who need dwelling to settle in the new environment. You can see that property management business is thriving and there are 5 apparent reasons why you should invest in it too.
Rent prices keep on growing incessantly
Even despite minor fluctuations in rent prices, if to look at the scale drawn since 1990 and by now, you will see a steady growth. In fact, the rental price has increased more than twice since that time and there are no doubts that it will continue to increase gradually. If to compare this scale with one showing the property sales, there used to be significant increases and drops up to $50,000 during this period and now property prices are at their peak. It means that the rental business is less risky and you suffer from market fluctuations less.
Every third housing occupied is rented
According to the Census Bureau, 31.5% of US citizens occupy the properties of other people. Consequently, every third American prefers to pay rentals instead of homeownership. At the same time, the percentage of people who live in their own homes is about 56% in 2019, so there is a huge gap that must be filled. The only conclusion to be made is a great demand for a rental property that will hardly eliminate in several next years.
Modern technology has simplified the process of property management
Hiring a property management company landlords realize that they get rid of the number of responsibilities giving them to the company representatives. Nobody is insured against leakage, breakdowns and the first place for tenants to call in this situation is, of course, a property management company. However, with the development of technology, communication with tenants and finding new customers has become much easier and more comfortable. There are special tools that simplify the work of managers and help to be organized and notified.
Vacation rental substitute hotels
Many people who have lived in hotels and compared this experience with short-term apartment rent will never return to a hotel. No wonder the number of people looking for a vacation property is constantly growing and there are high chances that vacation rents will outnumber hotels in 2020. Today, it is very easy to find an apartment with daily rent thanks to such popular platforms as Airbnb. This service can boast over 150 million clients per year, so property management business will flourish with such unbelievable statistics.
The number of renters entering the market is 5 times bigger than the number of landlords
As we have already mentioned, the number of landlords in the US is more than 23 million people who can serve only one-fifth of people who live in the rented property. Currently, over 113 million people are renters and this number is constantly growing. According to Rental Clock, more than 2,600 renters join the market on a daily basis in comparison with only 544 landlords who do the same. Consequently, we can see a huge demand for rentals and it can be a great rewarding business for investors.