This is good news for anyone who is looking to get into the rental property business. Zillow recently released their Zillow Rent Index which examines the home rental markets around the country. Despite falling home values, the median rent rate increased 3% from January 2011 to January 2012.
That 3% number is much higher in many markets, in some cases matching the home value decline rate. For instance, in the Minneapolis-St. Paul market, home values fell just over 8%, but rent rates rose 11%. We’re seeing similar numbers in Chicago, with values dropping over 10% but rent increasing by 9%. According to Zillow Chief Economist Dr. Stan Humphries, “A thriving rental market will stimulate home sales as investors snap up low-priced inventory to convert to rentals. That, in turn, will lower the number of homes on the market, which will eventually help put a floor under the values of all homes.”
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