Last updated on December 14, 2021
It’s never been a better time to be a landlord, according to a recent article from Bloomberg. That’s because landlords are benefiting from the biggest increase in tenants in recorded history. Rental occupancy rates are nearing 100%, leases are being signed within hours, and rent increases are surging by double-digits, creating the highest rent gains on record. Here are 20 interesting rental property owner statistics that every investor – and would-be investor – should know. The number of rental households has increased by 8.7 million since 2007, with about 43.3 million households renting in the U.S. According to Pew/Policy Advice, the total share of the U.S. renting market is nearly 37%, the highest it’s been in over 50 years.20 rental property owner statistics
1. The number of rental households grew by 25% since 2007
2. About 10.6 million people earn money from rental property
About 10.6 million people in the U.S. earn income from about 17.7 million rental properties. As the demand for rental housing continues to increase, it’s likely that the number of people earning rental income may increase as well.
3. Rental property owners earn nearly 45% more income
Landlords earn an annual income 44.8% higher than the median household income in the U.S. While households have a median income of $67,521, the median income of landlords is closer to $97,000 per year, according to Rent.com.
4. Majority of rental property owners are college grads
About 66% of today’s landlords are college graduates, according to the tenant screening website SmartMove. People of all ages are also landlords, with 56% older than 35 years and 44% between the ages of 18-34.
5. Investors own or manage an average of 3 rental properties
SmartMove also reports that landlords own or manage 3 rental units, with 31% of a landlord’s annual income coming from rental properties. Over 90% of average monthly rents collected are $3,000 or below, and 70% of rental properties owned have an average total value $400,000 or less.
6. Mom and pop landlords own 22.7 million rental units
Mom-and-pop landlords own about 16.7 million properties with about 22.7 million rental units. Individual investors like these typically own 1 or 2 single-family rental homes or smaller multifamily buildings with 2-4 units instead of large apartment buildings owned by institutional investors.
7. Investors purchased over 90,000 homes in Q3 2021
Real estate investors purchased 90,215 homes between July and September of this year, a 11.2% increase year-over-year and the second largest increase in history. According to GlobeSt.com, investor home purchases accounted for $63.6 billion in sales in Q3 2021, compared to $58.5 billion in Q2 and $35.7 billion in the 3rd quarter of last year.
8. Nearly 75% of investor residential real estate purchases are SFRs
Investors are also buying a record-setting number of single-family rentals (SFRs). Nearly 3 in 4 residential real estate sales in the 3rd quarter of this year were single-family homes, an increase of over 70% compared to the same quarter last year. As GlobeSt.com notes, rising home prices are pushing more people to rent, creating opportunities for investors to reap big profits by turning single-family homes into rentals.
9. One-third of all homes sold in some Sun Belt markets are purchased by investors
Secondary real estate markets in the Sun Belt – such as Atlanta, Charlotte, Jacksonville, and Miami – were investor favorites in Q3 2021. According to GlobeSt.com, nearly one-third of all homes sold in Atlanta during the last quarter were purchased by investors, followed by Phoenix at 31.7%.
10. Single-family rent growth is 11.7%, nearly double the growth of attached rentals
CoreLogic reports that single-family rent growth in August of this year increased nearly four times the August 2020 increase. Many would-be homebuyers have been priced out of the market, helping to drive up the rents of single-family homes. Annual rent growth for detached rentals was 11.7% in August, compared with 6.4% for attached rentals such as a unit in a multifamily property with 2-4 units, or a townhouse or condo.
11. Median gross rents range from $1,654 to $727 per month
The average rent in the most expensive state is nearly double the least expensive state, according to research from Rent.com. In Hawaii, the median average rent is $1,654 compared to West Virginia, where median gross rents of $727 are the lowest in the U.S.
12. Vacant to occupied rent growth is up to 17.1%, hitting an all-time high
Annualized rent growth of vacant-to-occupied SFRs is also reaching new highs, as migration to the suburbs combined with a tight housing market drives rent prices up. According to the Q3 2021 Single-Family Rental Investment Trends Report from Arbor, vacant-to-occupied rent growth was up 17.1% through July 2021, while rent increases on lease renewals reached a record 6.9% annualized rate in July.
13. Occupancy rates for single-family rental property at 95%
Arbor also reports that occupancy rates across all SFRs averaged 95% in the 3rd quarter of 2021, as measured by the U.S. Census Bureau. While occupancy levels declined by 0.30% compared to the 2nd quarter, occupancy in the single-family rental market is still operating at or near full occupancy.
14. Average tenant stays 3 years in a single-family rental home
About 70% of Americans live in a single-family home, making SFRs a popular choice for renters. According to research from Policy Advice and the National Real Estate investor, tenants stay an average of 3 years in an SFR, with stays of between 4-6 years not uncommon.
15. Refinancing accounts for 75.9% of mortgage originations and home prices continue to rise
The typical value of a middle price tier single-family home has increased by 34% over the past 2 years (Zillow, November 2019-November 2021) and is forecast to increase by 13.6% over the next year. With the way that home prices have been rising, it may come as no surprise that refinancing has accounted for the majority of recent loan originations to single-family investors. In Q2 2021, refinancing represented 75.9% of tracked mortgage originations, according to Arbor.
16. LTVs in single-family rentals is down to 65.5%
Single-family loan-to-values (LTVs) are down to 65.5%, a sign that credit risk is declining and remains aligned with the favorable outlook of the SFR sector, according to Arbor. LTV or loan-to-value measures the amount of mortgage debt compared to property value. As LTVs decline, equity in a home increases, reducing potential risk of default for rental property investors and lenders.
17. Mortgage delinquency rates declined by 22% during the pandemic
While there was some concern that the pandemic would trigger a wave of defaults seen during the Global Financial Crisis of 2007-2009, the residential housing sector is performing extremely well so far. Mortgage delinquency rates are 6.38% in Q1 2021 versus 8.22% in Q2 2020, according to the most recent information from the FDIC, with high levels of liquidity and robust buyer demand limiting widespread distress.
18. More than 36% of landlords hold back tenant security deposits
While the laws regulating tenant security deposits vary from state to state, 36.1% of landlords surveyed by Porch said they held back a security deposit collected from tenants. While a security deposit isn’t required by law, holding a deposit from a tenant may help to ensure the rent is paid on time and a tenant takes good care of a rental property.
19. About 44% of landlords use professional property management
When it comes to property management, 44% of landlords own but don’t manage their property, while 45% are owner-managers and 11% manage a property for someone else. Landlords who self-manage a rental property handle 6 calls a year from tenants, while 13% say that they change lightbulbs for their tenants.
20. There are more than 2,600 new renters every day
The number of renters in the U.S. is rapidly increasing each and every day. As the Rental Clock reports, there are 2,654 new renters coming to the market every day, or one new renter every 32 seconds. Of course, the number of landlords is increasing as well. Each day, 544 people become new landlords, offering one new rental unit every 80 seconds.
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