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Industry Trends: The Health of the Rental Market

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Much is written about the housing market, but the perspective is almost always from the point of view of buying and selling houses.  Seldom is the perspective from the point of view of landlords and the rental market.  This trend article is for landlords!

The key determinants of rental market health are often the same as for the housing industry overall, but the impact of some factors have the opposite effect on rentals.  For example, home ownership is declining.  That’s bad for housing sales, but good for the rental income.  Other indicators are common to both housing and rentals including general economic growth, consumer confidence, and changes in real median household income.  Other factors, such as vacancy rates and rental rates seldom receive coverage in housing news, and are usually not included in analyses.

The dashboard shown below is a recap of economic trends for factors we know impact the rental industry.  The numbers shown in each house image is either the consensus projection for each factor or from the latest available data.  Coloring reflects whether the number or trend for the factor is positive (green), neutral (yellow) or negative (red) as it relates to the rental housing industry from the perspective of landlords.

 Based on current data and Real Property Management projections for 2015, the outlook for the rental market for landlords is projected to be “steady as she goes” and very similar to 2014.

Thought? Questions? Opinion?