A Zumper Rent Report showed that rents for one-bedroom apartments in two of the top 10 most expensive markets in the U.S. posted declines in November.
San Francisco and New York’s median rents for one-bedroom units dropped by 1.2% to $3,389 and 1.3% to $3,000, respectively. The decline in SF rents has been a trend for the fourth straight months, while the same has happened in the Big Apple for three months in a row.
The report also showed that almost half of the top 10 rental markets in the country has registered either neutral or lower median prices for one-bedroom apartments in November.
Two-bedroom apartments have fallen in November at a faster rate compared to one-bedroom units with an almost 60% drop in several markets. That contrasted another report from Apartment List that showed rental prices, while different from turnkey rental properties, surged to an all-time high in August.
The Apartment List report revealed that the national average rental price index increased by 2.0% in October, as the pace of demand has surpassed the available supply and construction of new apartments.
Despite the lack of real estate for building residential properties in cities such as downtown Chicago or Boston, the rate of demand among renters continues to increase between 6% and 7% per year, according to the report.
For investors, the prospect of gaining favorable returns from rental properties appear to be a likely winner. As demand increases and supply wanes, prices are simply bound to increase and provide landlords among other investors with an apparent way to earn a profit.
However, investing in rental properties requires a significant amount of your time and financial resources. On the monetary side alone, potential investors should be aware of the corresponding costs, which include taxes, before exposing themselves to the rental market.