Rentals Vs. Ownerships: Which Industry Is In Boom?

Despite the booming signs, the real-estate industry has not recuperated yet; at least not in a healthy manner. The value of real-estate properties has remained low but surprisingly, there are not buyers expressing the willingness to purchase. But, just like all things in this world, if there is a struggling market, there also is a flourishing one. With the increase innovation in rental properties nowadays, such as property management software and mobile search websites,  investing on this industry is equivalent to success.

Throughout the nation, rental prices are continuously increasing in a rapid movement. However, those cities which are receiving great demands are those that have strong and well-established job markets. These cities are located in the coast such as Seattle, LA, Boston and Washington D.C. These cities are adding up more and more jobs each year; most jobs are under the IT industry.

The center of this high-tech market is the bay area of San Francisco which has recorded a constant 12% increase in the rental population. As reported by the economist at UC Berkeley, Kenneth Rosen, this 12% increase in is by far the biggest ever recorded in the country with an average rental amount of $2,572.00.

Why are rental prices increasing?

In the last decade, the need for rental property units has increased. One reason for this is the increase in real property management foreclosures; however, there still are other significant contributing factors.

Since the emergence of the new millennium, San Francisco has experienced a tremendous increase in their population reaching to 300, 000. Most of these residents are well-versed tech workers who are willing and more than able to rent.

According to Kenneth Rosen, 40, 000 job orders were added to Silicon Valley and more than 19, 000 in San Francisco. These jobs are of social media, bio-tech and technology in nature. This is the reason why thousands of IT experts transferred to Bay Area, increasing the renters' property as well.

Because there is a slow response to the job orders posted in the coastal cities, there is still continuous hiring until today. Due to these facts, more and more migrants are looking for rental properties and while there are still not enough constructed rental units, this searching population will keep the prices of rents high. In fact, because there are numerous applicants for a single rental property alone, few agents charge fees if possible renters want to check out the place.

Why are these workers not purchasing residential properties?

A lot of consumers decline the opportunity of buying cheap residential properties because of the risk of foreclosures. If they are unfortunate to experience this, they will have to build a good credit history again to become a homeowner once more.

Aside from the financial considerations, emotions are big factors also. There are a lot of financially capable people who refuse to own a property because this booming market might turn sour once again. With the economy's recession, outgrowing student's credit card debt and parents struggling to save the house ownership, a lot of the young breeds of workers aren't enthusiastic in purchasing their own home anymore.

Despite the fact that rental pays are high, San Francisco still has 3.7% vacancy rate. This constantly increasing rental rates just imply that landlords are rejoicing again. Becoming a landlord or a real property management expert, definitely, is not a bad career especially when the rental property trends continue to rise.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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