For rent: Favorable demographic trends and improving economic conditions will support industry growth

Operators in the Apartment Rental industry are set to reach new revenue highs over the five years to 2017. Since the subprime mortgage crisis, the industry has undergone structural change. Primarily, the recovery in housing prices has been driven by investors, rather than first-time homebuyers, demonstrating a shift in demand for real estate. Historic lows in homeownership, decreasing rental vacancy rates and surging demand for rental units have enabled landlords to increase rents, aiding revenue growth. Over the five years to 2022, industry revenue is forecast to rise, albeit more slowly. This anticipated slowdown is likely the consequence of an oversupply of luxury units...purchase to read more.

Industry Statistics & Market Size
Revenue
$163bn
Annual Growth 12-17
5.0%
Forecast Growth 17-22
Profit
Employment
781,153
Businesses
515,623
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Employment and income levels will rise, enabling some people to afford renting at higher rates
  • The effects of vacant high-end apartments will drag on industry performance
  • The increase in unemployment is likely a consequence of discouraged workers returning to the workforce
  • Industry Report - Industry Analysis Chapter

    Over the five years to 2017, operators in the Apartment Rental industry have experienced historically strong growth. The industry is mostly composed of small companies, many of which are individuals who rent out spare rooms in houses, secondary residences or homes converted into apartment units. However, the industry has exhibited a changing structure. Though large institutional investors have spearheaded growth by purchasing formerly distressed properties and converting them into rental units, smaller investors are now fulfilling the remainder of rental unit demand. According to a new study published by ATTOM Data Solutions and Clear Capital, 79.0% of landlords now own only one to two properties. Moreover, the share of nonowner-occupied properties rose from 32.0% in 2015 to 35.0% i...purchase to read more.

    Additional Insights for the Apartment Rental Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Apartment Rental Industry are

  • Financial structure of the company
  • Management of a high-quality assets portfolio
  • Superior financial management and debt management
  • IBISWorld analysts also discuss how external factors such as Rental vacancy rates and National unemployment rate in the Apartment Rental industry impact industry performance..

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    What's in this report

    What is the Apartment Rental Industry?

    Operators in this industry act as lessors of buildings used as residences or dwellings. Industry participants are owner-lessors of residential buildings and establishments that rent real estate and then act as lessors by subleasing it to others. In addition to apartment rentals, the industry also includes single-family homes and town houses.

    Industry Products
  • Rental of one-unit structures
  • Rental of two- to four-unit structures
  • Rental of five- to nine-unit structures
  • Rental of 10- to 19-unit structures
  • Rental of 20- to 49-unit structures
  • Rental of 50- or more unit structures
  • Rental of manufactured homes, mobile homes or trailers
  • Industry Activities
  • Renting or leasing residential buildings
  • Renting or leasing residential dwellings
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Rental vacancy rates
  • National unemployment rate
  • Homeownership rate
  • Yield on 10-year Treasury note
  • Urban population

  • Current Performance
  • Dynamics of demand
  • Demographics of demand
  • Industry structure
  • Slow down ahead
  • Chart: Revenue Growth

  • Industry Outlook
  • Economy provides stimulus
  • Favorable demographics
  • Increasing supply and competition from housing
  • Table: Apartment Rental Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Apartment Rental Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Finance and Insurance
  • Retirement & Pension Plans

  • Key Selling Industries
  • Construction
  • Finance and Insurance
  • Landscaping Services
  • Property Management
  • Real Estate Sales & Brokerage
  • Utilities

  • Products & Services
  • Rental of one-unit structures
  • Rental of two- to four-unit structures
  • Rental of five- to nine-unit structures
  • Rental of 50- or more unit structures
  • Rental of 10- to 19-unit structures
  • Rental of 20- to 49-unit structures
  • Rental of manufactured homes, mobile homes or trailers
  • Chart: Apartment Rental Industry Products and Services Segmentation

  • Demand Determinants
  • Demographics
  • Urbanization
  • Housing market
  • Economic conditions

  • Major Markets
  • One person
  • Two persons
  • Four or more persons
  • Three persons
  • Chart: Major Market Segmentation for the Apartment Rental Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Depreciation
  • Wages
  • Purchases and marketing
  • Rent and utilities
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Apartment Rental

  • Basis of Competition
  • Internal
  • External

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Apartment Rental Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Apartment Rental Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Apartment Rental Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Rental Vacancy Rate (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Dwelling
  • Another name for an apartment or home.
  • Funds From Operations
  • Funds used to define cash flow from operations for REITs that are calculated by adding depreciation and amortization expenses to earnings.
  • Leadership In Energy And Environment Design (Leed)
  • An eco-oriented building certificate program established under the US Green Building Council. LEED-certified buildings are energy-efficient and green certified.
  • Occupancy Rate
  • The amount of occupied real estate space as a percentage of total available space.
  • Real Estate Investment Trust (Reit)
  • A legal entity that uses pooled investor capital to purchase and manage income property or mortgage loans. To qualify as an REIT, the entity must distribute at least 90.0% of taxable income.
  • Rental Agreements
  • An agreement with no set period of occupancy in which landlords and tenants are free to make changes to the contract at the end of each 30-day period.
  • Vacancy Rate
  • The amount of unoccupied real estate space as a percentage of total available space.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Apartment Rental Industry Research Report offers insight into the market at the national level. Our analysis highlights macro trends in the overall sector and the micro trends faced by companies that do business in the Apartment Rental industry. Our five-year outlook forecasts explain how the market is set to change and the product segments that will drive growth.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Apartment Rental:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Apartment Rental market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Apartment Rental, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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