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The Renter/Investor Relationship

non-owner-occupiedWith 1 in 10 indicating that they would like to go back to renting, Porch.com takes a look at the booming rental investment landscape, exploring the renter-landlord relationship. According to Porch, between 2006 and 2016, the number of households renting their living spaces increased from 31.2 to 36.6 percent, just a touch lower than the number of households that rented out in 1965. Despite the fact that in general, mortgages are cheaper than rents across America, down payments are still a significant barrier to homeownership, leaving rent as the best option for many.

According to the Survey, a large chunk of landlords, over 40%, indicated a stress level of three out of five or higher, with five being the highest level of stress. However, Porch’s survey of 563 renters and 532 landlords reveals that most landlords, 80.1%, believe the money is worth the stress of property management.

Additionally, most land owners and managers trust their tenants to maintain their property, and most renters state that if they owned their own home, they would treat with the same amount of care as a rental if not better. However, the deposit problem is still the number one barrier to homeownership for many renters. According to LendingTree, factors impacting homeowner outlook on renting vs. owning can include the level of commitment that goes into becoming a homeowner, as well as the financial responsibilities involved.

Rents increased 2.9% year over year in February 2019, and CoreLogic states that single-family rents climbed steadily starting in 2010, and annual rent increases have stabilized, fluctuating between 2.7 and 3.1% for the past 12 months. However, in some metros, renting is still cheaper than owning. LendingTree compared monthly rental and mortgage payments for homes in the 50 largest U.S. metros to rank the top locales for each option. LendingTree’s list of cities where renting is cheaper than owning a home includes Louisville, Kentucky; Milwaukee; Oklahoma City; and more.

This preference for renting could be good news for investors. Real estate investments, including rental properties, are more popular than ever, according to a recent Gallup poll. That poll found that 35% of Americans consider real estate to be a superior investment over stocks, compared to 27% who said stocks were a wiser choice.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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