In 2015, a Harvard study warned renters and potential buyers that rising rents would be the status quo for the foreseeable future. The researchers' numbers weren't lying. At least not so far.
The World Property Journal reported this month that the latest stats on rental rates show rents skyrocketing in Florida and elsewhere around the country. Topping the list for the highest rental rate increases in the nation during the last quarter of 2015 was the South Florida market with over a 25 percent increase in rental rates. Unfortunately, the problem isn't limited to South Florida. The greater Daytona Beach area ranked 4th in the nation with a nearly 15 percent increase in rental rates. (Two Louisiana metro areas ranked second and third on the list, published by rental market research company RentRange.)
Other states joining Florida and Louisiana at the top of the list in feeling the pain of high rent hikes were Arkansas and Tennessee, the report said. And of course metro areas in places like California and Hawaii made it into the top 25.
World Property Journal advised current and potential investors in the article that the southern state markets experiencing high rate increases now are actually "ripe for investment" since they account for the "highest gross yield percentage returns" on the 25-city list put out by RentRange.
"The single-family rental market remains strong across the U.S. as the homeownership rate continues to decline and a higher percentage of the population migrates to rental housing," said Walter Charnoff, Chief Executive Officer of the RentRange business told the World Property Journal. "As the real estate market continues to improve, we are seeing significant rental price increases in many markets, which bodes well for investors in this space."
Locally, Wyse Home Team CEO Ron Wysocarski said the takeaway for Daytona Beach area renters and real estate investors is this:
Renters with the financial ability to buy a home and a lifestyle that's conducive to home ownership should seriously consider making the move now. The sooner people in this category close on a home, the less they will be affected by rising rents, rising interest rates and rising median home prices.
Investors: It's a good time for real estate investors already in the property management business and those considering entering the business to consider adding new properties to their portfolios sooner rather than later. Investors also will reap the benefits of lower interest rates, lower median home prices and rising rents with an earlier investment this year. And, as the banks push out the last of the distressed properties that have been hanging in the foreclosure winds for the last several years, there are still great investor specials and deals hitting the market.