5.6 million cheap apartments - not for long
I just read this article on Bloomberg and wondered what others thought about it:
All the rage in rei these days is buying these apartments, fixing them up and raising the rents. It makes me wonder where all this is heading.
My own small town is a good example. New class A apartments are being constructed for around $100k/unit $1000+ monthly rent. Nothing less expensive than that is economically feasible to build. The local housing authority/builders getting tax credits are adding some stock. But I read the other day they're spending about $150k/unit on construction.
Here, a good affordable 2 bedroom apartment is around $500/month. Demand for them is very high because it's economically impossible to create any more of them.
The most interesting thing to me in the article is the chart showing when most of the apartments were built, the 60's and 70's during baby boomer times. We're just starting that with the millennials so that says a whole bunch of apartments need to get built and everything else being equal average rents should continue to climb...