The Rent Index and What it Suggests for Property Managers
On almost a daily basis I hear anecdotal reports of syndicated investors as well as rogue opportunists seeking to find bargain houses that they can buy, fix up and rent out. At the same time the number of Americans who can’t qualify for a mortgage or don’t have enough money for a down payment is on the rise.
This trend is why vacancy rates in most regions of the country are in decline and why the rent index is looking healthier than it has in years. Zillow.com happens to be a good source of information on the rent index, and reported about it as recently as Oct.22, 2012.
“The Zillow Rent Index (ZRI) covers 310 metropolitan areas and 67% of those metros reported annual increases in rents in September. As a point of comparison, 50% of the metro areas covered by the ZHVI experienced annual home value increases. Nationally, rents increased 6% in September from year-ago levels and rent growth continues to be robust, fueled by the entry of foreclosed households into the rental market and increasing household formation itself (newly formed households often choosing to rent before buying). Markets that saw extremely strong year-over-year rent increases include Baltimore (10.7%), Chicago (10.7%), Philadelphia (8.2%), and San Francisco (8.0%).”