Residential Landlords Collected More Than $568 Billion in Rent for 2016
2016 was a good year to be a landlord in the United States. Approximately $568 billion was spent on residential rent over the last 12 months, with landlords ranging from those renting out a room in their home to realty companies with valuations in the 11 figure range.
To put that number in perspective, it would take about 16 months’ worth of total rent to pay off every American’s credit card debt. A little more than two years of total rent to pay off every car loan in the U.S. and about 28 months of total rent to pay off everybody’s student loans.
Americans currently hold about $8.8 trillion in residential mortgages, but the benefit of a mortgage is that you are building equity with every payment, especially towards the end of the loan. That’s not to say that it’s always better to buy as opposed to rent, it does make sense to carefully compare to pros and cons of renting and buying if you are going to stay somewhere for more than a couple of years.
What the number does tell us is that rents are going up in general and vacancy rates are going down. In most places around the U.S., the share of income going towards rent is rising, reducing renters’ discretionary income.
The $568 billion figure was reached by approximating the number of renting households in the U.S. and multiplying it by the average U.S. monthly rental payment.
Look in almost any city and you will see new apartment complexes going up and in suburbs/some rural areas, new houses are being built. The population is growing which necessitates new housing, but it seems as though much of what is being built is aimed towards the rental market.