Based on a report from DailyFinance.com the top ten growth industries for 2011 are:
1. Iron Ore Mining
2. Investment Banking and Securities
3. Multifamily Homebuilding:
The report states that after revenue tumbled from $40 billion in 2006 to just $19 Billion in 2010, this industry is projected to finally see growth again in 2011. Rental income will be the key to the industry’s revival as an economic recover is expected to increase demand for properties that have rentable apartments. “The cyclical recovery of the real estate market, including improvements in property values, rental rates and transaction volumes, will support this industry.”
So, naturally, the real estate market is where you want to be if you want to invest your dollars wisely. Right now I emphasize to my students to look for multi-family real estate. The reason is simple:
Apartment dwellers could be facing double-digit rent increases in the coming years as a shortage of new multifamily units coupled with a rise in prime renter-age households gives landlords clout they haven’t seen since the mid-1990s, say development experts.
“Demand pressures are building. It’s not bad today because rents have been down the last two years,” said William McLaughlin, an executive vice president with Avalon Bay Communities in the Northeast. “But it feels a lot like 1992, when we were coming out of a deep recession…and we ended up seeing double-digit rent increases after that,” he said.
Multifamily developers broke ground on just 114,000 units in the United States in 2010, a figure so low that it wouldn’t account for all the multifamily units lost last year to the wrecking ball or natural disasters, said David Crowe, chief economist for the National Association of Home Builders.
Although expected to grow 16% to 133,000 starts in 2011, that number, too, would leave a substantial deficit in the number of units needed to meet expected demand.
In another article from Walletpop.com, it says that rental properties will be in demand for 2011.
As home ownership has become less of a financial asset and more of a liability over the last few years, there has been a shift in the very fabric of what renting means in our society.
We predict that in 2011, the demographics of who rents will continue to change, along with the place renting has in our social values system. The tools renters have at their disposal will evolve in kind.
The American Dream Will Include Both Renting and Owning. It used to be, renting was widely viewed as the last resort option for getting a roof over one’s head, or as something people did until they had enough maturity, life stability, job stability, income, the credit score and/or the savings to qualify for a mortgage or afford to buy a home. In 2011, though, renting-by-choice — i.e., renting by those who can afford to buy — for years, or even permanently, will stop being a dream deferred.
With millions of Americans having experienced the loss of tens or even hundreds of thousands of dollars in equity in the recent housing crisis — and some actually losing their retirement savings and homes themselves — renting will shed any remaining stigma next year. In fact, some who rent by choice will see their decision respected as going against the herd mentality that favors home ownership at all costs. For others, renting will simply be a simultaneously smart and liberating financial decision shared by a growing segment of Americans of all ages and socio-economic strata.
So, I always recommend to my students to listen the elective class: “Big Profits in Multi-family Real Estate.”
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