Rental Income Demand and Profit Strong for Investors

By Stevie Duffin Updated on 12/14/2012

 

 

Residential property rental income rose 12% over the course of last year during September.  Rents are continuing to rise due to increased demand.  CoreLogic, a property analytics firm has been showing increased confidence about the overall housing economy for the past few months, but has also shown concern regarding the upcoming year.  Uncertainty in the business atmosphere raises the question of whether or not the economy will be able to sustain itself.

Analysts believe that the lack of a cemented plan to fix the fiscal crisis has decreased the confidence of business executives.  Unresolved problems relating to the European debt crisis have also had a damper on confidence. 

Despite all of this, real estate has been doing extremely well for the past several months.  The real estate cycle has produced residential investment that contributed to economic growth.  Lenders are staying with lending and are only lending to the most qualified of borrowers.  The rise in rental income year after year shows that rental properties are becoming affordable for investors; this shows an overall rental demand in the aftermath following the housing market crash. 

Analysts believe that rental demand will continue to rise in the residential sector due to job growth and weakened wage income.  This will spur tightness within the single-family rental market.  The only blocks to a full housing recovery can be fixed by reducing mortgage risk, increasing clarity regarding housing policies by policymakers, and having the economy driven completely by investments.

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