HUD/Census: Nearly Half of Rental Units Are in Small Multifamily Properties
Nearly half of the nation’s 48.2 million rental housing units are in properties with less than five units, HUD and the U.S. Census Bureau reported.
For these small rental properties, nearly 73 percent (14.1 million) are owned by individual investors and more than one-third (7.9 million) have a mortgage or similar debt.
Conducted every three years, the Rental Housing Finance Survey studies property configuration, ownership and management, rental income and expenses, financing, capital improvements and expenses in the country’s 20 million rental properties.
This year’s Rental Housing Finance Survey highlights include:
Rental Property Configuration
–More than 85 percent of all rental properties contain only one rental unit and 97 percent have only one building.
–Just over one-third of all rental units are in properties with one rental unit, while nearly 30 percent of rental units are in properties with 150 or more rental units.
Ownership and Management
–More than 70 percent of rental properties, representing 41 percent of all rental units, are owned by individual investors. For properties with 150 or more units, 63 percent are owned by limited liability corporations or partnerships.
–Just over 20 percent of small rental properties with four units or less are managed professionally while 94 percent of properties with 150 or more units are managed professionally.
Rental Income and Expenses
–The median monthly rental receipt per rental unit is $750.
–The median monthly operating expense (not including debt service) is $325 per rental unit.
Property Purchase, Value and Financing
–The median estimated market value per rental unit is $110,800.
–The median purchase price per rental unit is $75,000 (not adjusted for inflation).
–About 42 percent of all rental properties have a mortgage or similar debt. For properties with a mortgage, the median debt per rental unit is $119,000 at mortgage origination (not adjusted for inflation).
Capital Expenses and Improvements
–About 78 percent of property owners reported making some type of capital improvement to their rental unit(s) in 2017.
–Owners annually spend a median of $500 per rental unit on capital improvements.