The Factors Affecting Rental Demand

 Real estate is at the forefront of most conversations revolving around the economy and financing. If you are wondering why, it is because it is a profitable venture …

 Real estate is at the forefront of most conversations revolving around the economy and financing. If you are wondering why, it is because it is a profitable venture to be currently involved in. This is due to the rapid increase in rental demand in the United States. Now more than ever, people are renting out various residencies. This trend has taken an upturn compared to the number of units being sold.

Experts say that this elevation is not about to change anytime soon. According to a study conducted by Harvard University, rental properties should be experiencing an increase in demand. Of course, once you consider the various factors that have a direct impact on this trend, this is not so surprising. This is why it is a perfect opportunity to cash in on the demand. You should consider getting involved in property with direct investment or even REIT alternatives such as non-traded REITs. If you are not convinced, take a look at some of the aspects of rental trends:

Changing Demographics

The first thing that needs to be considered is the overall population, along with how it is changing and will continue to change. This is largely due to the number of millennials in the country. At the moment, they have surpassed the baby boomers to claim the number one spot as the largest group. At this point, only half the millenials have occupied the rental market at about 11.3 million households. However, the other half of the millenials are teenagers or in their early twenties. This means over the next couple of years, the number of people renting is actually going to double. It is estimated that within the next ten years, the number of millenials renting out residences will increase to 22.6 million.

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Economic Factors

The economy and financial institutions have also contributed to the increase in renting. The fact that millenials are currently taking over the population means a lower income overall. While this tends to be quite typical for this age bracket across the world, there are compounding reasons. This is largely due to an increase in student debt and a slump in the labor market. Of course, these are not the only issues. Banks are also reducing the number of mortgages that they hand out. Still reeling from the last debacle, banks are not placing their faith in individuals who are not financially reliable. As this seems to include most of the millennial population, few individuals are going to become homeowners in the next decade.

Migration Patterns

Another trend that has been occurring is the increasing immigrant population in America. This pattern seems to be set for the next couple of years. Based on research conducted, it seems that those who have migrated to the U.S. are more likely to rent. In fact, 74 percent of these individuals appear to be renters. This, too, will only add to the number of rental spaces that will be requested over the next few years.

There are several different ways that you can profit from this current real estate tendency. It is a good idea to do some research and to find out just how you can be involved in this profitable movement.  


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