The world of rentals is exploding with people due to new ways of working, traveling and living.
Renters aged 60 years and older are losing their enthusiasm for owning their own homes, according to RentCafe, an apartment search website. The company said, “As their children move out, they (seniors) find themselves alone, in a big house that costs lots to maintain, causing them to rethink housing choices.
Nationwide, the number of senior renters has increased +43% over the last decade. Austin has seen a +113% increase in the share of older renter households; Phoenix has seen an increase of +112% of older renter households; and Fort Worth has seen an increase of +95% of older senior households in the last 10 years.
According to Zillow’s latest Real Estate Market Report, the rate of rental growth hit an all-time high in February 2019. Zillow calculated the median rent nationwide to be $1,472 with rent prices rising at the fastest pace in the last 10 months. Only Orlando and Pittsburg were outliers in this rent price increase.
Meanwhile, companies such as Blueground are raising millions of dollars to transform apartments into luxury medium-term rentals that rent to “vetted” renters for 30 days or more. Companies such as Blueground, Related Rentals, Stonehenge, UDR and Pinnacle Living work with property owners and managers to lease apartment units prior to those units hitting the market for sale.
Typically, these companies lease out several units of a property with the intention of holding those units for medium-term rentals for several years. The benefits to the landlords include “steady cash flow and value-added financing solutions.”
Blueground currently owns 1,800 apartments in New York, San Francisco, Los Angeles, Boston, Washington DC, Chicago, Istanbul, Athens and Dubai. The company plans to be leasing 50,000 apartments worldwide in the next 5 years.
CEO and co-founder Alex Chatzielef Theriou said, “For business guests, we’re providing a more spacious, lower cost alternative to a hotel…It will also allow us to elevate the seamless experience we’re providing landlords and guests…” Kevin Ryan, a recent Blueground investor and co-founder of Gilt and Business Insider, said, “Blueground provides a product that speaks to a human need in an increasingly mobile business world.”