Last week there came this snippet from a radio commentary: “No matter how business is doing, the landlord business is doing just fine.”
Especially in the context of last week’s nerve-rattling tumult on Wall Street, that remark seemed particularly relevant—especially for investors newly motivated to investigate the upside of St. Louis residential investments.
There is one national statistic that unambiguously points in a positive direction—one that current landlords from coast to coast should find comforting. The indicator in question is the Moving Rate—and it’s signaling stability.
In the common vocabulary of commercial business, the Moving Rate describes the “customer base” for the “product” that residential investors produce. It is the statistic that measures the rate at which renters move from one residence to another. In the latest available calculation, that rate continues to hover at the very bottom of the meter. According to the U.S. Census Bureau, the most recent accounting “hit an all-time low of 21.7% in 2017.” Especially considering that the Moving Rate for renters in 1988 was 35.2%—a little more than one in three—the increase in stability is notable. And there’s no evidence that it has budged since 2017.
It goes without saying that when renters stay put, landlords prosper. Not only is their rental income steady, but the costs associated with reconditioning a property following a moveout are avoided. Advertising and showing expenses are nil—as are the lost months of income that might result. Steady occupancy also means avoiding the extra time investment that recruiting new tenants can require—and steering clear of the risk that the new customer might prove less than reliable.
With so many costs being avoided or minimized, when the Census Bureau headlines “Overall Mover Rate Remains at an All-time Low,” it’s encouraging news for St. Louis investors considering the area of residential real estate. For a full look at today’s range of St. Louis investment possibilities, give me a call!