Other than mobile home parks and self storage units, we haven’t been too excited about commercial real estate investing for a while, but single family residence rentals are looking quite nice for landlords. Here’s why we think “foreclosure families” are going to be bailing out of apartment complexes and setting their sights on single family residence houses in the near future.

Rents are Rising
Vacancies are falling and rents are rising. That’s a good thing for apartment building landlords, right? Yes, up to a point. The problem that’s going to arise is that many real estate markets around the country are still very, very weak, which means house prices are quite low. No surprise. We’ve been telling you that for months. At some point in the near future, rising apartment rents are going to reach the tipping point where it’s cheaper to rent a single family residence than an apartment. At that point you can bet there will be a giant WHOOSH as families head for the suburbs again, this time as renters.

Housing Vacancy
While apartment vacancies are tightening up, housing vacancies are still a long way from feeling the pinch of too few units. States like Nevada, Florida, Michigan, Georgia, and Rhode Island have a plenty of vacant single family residence rentals at competitive prices.

Families Like the ‘Burbs
“Foreclosure families” are, generally speaking, not going to be as comfortable in an urban apartment building setting. Those are the facts. They’re used to a house in the suburbs with a private backyard and a good school nearby, amenities that too many apartment buildings simply can’t offer. Maybe the family experienced a financial disaster, got upside down in a mortgage, and lost their American Dream. They might not be able to buy the dream back right now but renting it is the next best thing

There’s a reason that living in an apartment never caught on as the new American Dream.

The AIPIS Team

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