The real estate market has taken a few hits in the past few years. First, millennials entered adulthood with less interest in and ability to purchase homes as preceding generations. Then, interest rates went up, followed by an increase in prices and a cooling off period for buyers of all ages. However, there is a new reason to reconsider real estate investments in Florida.
CNBC reports that homes built specifically for renting are now on the rise. A Florida-based builder in Tampa recently launched an IPO to raise $100 million. What for? To build tract homes that will be sold in bulk to real estate investors. This may be a lot like owning an apartment complex, except that the residents have more privacy. Florida is not alone in this new development either. Other builders across the country are collaborating with investors to bring projects like these to life.
The approach is not new. In 2017, builders erected 37,000 homes for the purpose of renting them. By 2018, that number grew to 43,000. As millennials and other generations are focusing more on renting than buying, this gives real estate investors an opportunity to make the best of the current market. In addition to this, the growing number of available homes will make renting more affordable, making it an even more attractive option to buying.
According to Forbes, the most important driver for housing is job growth. This is higher in Florida than many other states, making it an especially likely location for investors to look into. While there is no telling how long this rental boom will last, there may be no denying that there will always be a demand for rental property, both for long-term and short-term arrangements.