As a resident of Los Angeles, I spend way too much time in my car. While traveling the city from one end to another, I’ve noticed a fair bit of construction going on. I started paying closer attention and realized that well more than half of these projects appear to be multi-family residential projects, also known as apartment buildings.
As it happens, I also know a lot of folks in the real estate space out here. I ask about all these projects, and they invariably reply that they themselves are investors in these apartment buildings.
The reasons for the apartment building boom are not surprising. During the housing crisis, lots of people got kicked out of their homes. Since then, with wages remaining flat in the face of ever-increasing inflation, and with more than five million people leaving the workforce since 2009, people cannot afford to pay huge mortgages.
The result is that homes have started selling rather briskly again. All those people need a place to live, so they move into apartments. That explains why rent prices have soared in the Los Angeles area. It isn’t just here, either. It is happening all over the country.
That leads to the notion that apartment rental REITs are a good place to look to invest. This trend towards apartment living and rising rental rates is likely to continue for some time because this macroeconomic trend is not going to change anytime soon. With that in mind, here are three of the best stocks to play this trend.