Are You Paying Attention to the Demand Side?
Are You Paying Attention to the Demand Side?
When we look at a rental property, most of us know exactly what numbers we want to see. What’s the purchase price? What’s the rehab going to cost? What can I finance it for? What are the comps? And, of course, what will it rent for?
But there’s another question I think investors need to spend more time asking: Who is actually going to rent it?
We spend a lot of time analyzing the property and not nearly enough time thinking about the person who needs a place to live. And right now, that’s worth paying attention to.
According to Harvard’s Joint Center for Housing Studies, nearly half of U.S. renter households were cost-burdened in 2024. Here’s another number that really caught my attention: from 2001 to 2024, renter incomes increased 9% after adjusting for inflation, while rents increased 30%.
Think about that for a minute. This isn’t something that happened overnight. The gap between what people earn and what housing costs has been growing for more than two decades.
As real estate investors, we can look at that as a problem, but we should also look at it as a demand signal. There are a lot of working people who need a good place to live, but renting an entire house or apartment is becoming harder to afford.
That’s one reason I think the co-living model is worth understanding.
Instead of renting an entire property to one household, co-living allows individual residents to rent rooms. Done correctly, it can create a more attainable housing option for the residents while potentially generating more income from the same property for the owner. That’s an interesting combination, especially in the market we’re in today.
Now, that doesn’t mean every house should become co-living. It doesn’t mean every deal works. And it doesn’t mean you should jump into a strategy just because you heard somebody talking about it.
It means you should learn how it works so you can decide for yourself.
That’s exactly what AZREIA is here for.
Next month at our Monthly Meeting, we’re going to be talking about turnkey PadSplits and the co-living model. If you’ve been curious about PadSplit, wondering whether co-living makes sense in today’s market, or simply looking for another strategy to add to your investor toolbox, I encourage you to come.
Come learn how the model works, ask questions, run the numbers, and talk to other investors. Then decide whether it belongs to your business.
You may walk away thinking, “This isn’t for me.” Or you may walk away seeing an opportunity in a property you would have passed on before. Either way, you’ll know more than you did when you walked through the door.
And that’s one of the biggest reasons we continue to hold these meetings month after month. AZREIA exists to help Arizona investors get the education, market information, resources, and relationships they need to make better decisions and take action.
Don’t just hear about what other investors are doing. Come learn how it actually works.
See you at the next meeting
Michael Del Prete
Executive Director