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AI Is Moving In. Rents Are Moving Up. | 624
• 43 minKeith examines why renters made up nearly 80% of U.S. net household growth last year, and how housing supply explains the gap between rents falling 8% in Austin and rising 17% in San Francisco and Chicago. Terry Kerr and Matthew Van Horn of Mid South Homebuyers join to discuss new-build rentals under $200K in Memphis, Little Rock, and North Texas, in-house property management, duplex deals, and financing incentives with rates bought down into the fives. Join Keith, Terry, and Matthew live for a properties event on September 30th. Sign up here: www.GetRichEducation.com/MidSouth The episode closes on the AI buildout reshaping Memphis, where xAI's Colossus, Anthropic, and Google are driving billions in investment and a share of the new tax revenue back into surrounding neighborhoods. Episode Page: GetRichEducation.com/624 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching: GREinvestmentcoach.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments. For predictable 10-12% quarterly returns, visit FreedomFamilyInvestments.com/GRE or text FAMILY to 66866 Join Mid South Home Buyers' one-time, free live webinar featuring Keith Weinhold on September 30 at GetRichEducation.com/MidSouth to learn how Memphis' economic expansion could create new real estate investment opportunities, and have your questions answered in real time. Will you please leave a review for the show? I'd be grateful. Search "how to leave an Apple Podcasts review" For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— GREletter.com Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript: Keith Weinhold 0:01 Welcome to GRE. I'm your host Keith Weinhold. U.S. rent growth is led by cities with AI investment and those with a lack of new housing supply. Then we're talking about new build properties for under 200k that cash flow and with mortgage rates that are bought down into the fives today on Get Rich Education. What if I told you that one of America's strongest cash flow real estate markets is also becoming the new brains and brawn behind AI? That city is Memphis, believe it or not. In September 30th, we're going to show you why the smart money is paying attention now, along with an investing opportunity you won't want to miss. Join me, Terry Kerr and Matthew Van Horn of Mid South Homebuyers, the largest turnkey company in Memphis with more than 6000 homes under management, for a free live webinar the likes of which I've never done before. We're going to look at what billions in new investment could mean for jobs, housing demand, neighborhood appreciation, and your portfolio. Everyone who attends live will also get exclusive access to the best deal terms Mid South has ever offered. Reserve your free seat at getricheducation.com/midsouth again, that september 30. Don't say we didn't tell you. Save your spot at getricheducation.com/mid south. Speaker 1 1:33 You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education. Keith Weinhold 1:49 Welcome to GRE from Davenport, Iowa, to Smethport, Pennsylvania, and across 188 nations worldwide. I'm Keith Weinhold. You're listening to Get Rich Education. Hey, near the end of today's episode, I'll announce where I'll be appearing live and inviting you to join me. But first, most real estate headlines that you see out there for quite a while now, they tend to focus on just how difficult buying a home has become amidst higher prices and mortgage rates-it's kind of an old story by now. But for investors, the other side of that story is what matters. When fewer people can buy homes, well, more people have to continue renting them. Only 6 million of America's 50 million renters can afford to buy the median home. In fact, so that means then that only 12 percent of America's renter households can afford the median home. That is just remarkable, and that's exactly why they have to keep renting, but you know what's more remarkable is the growth of this group of people itself. Last year, the U.S. added an estimated 898,000 renter households, but only 234,000 homeowner households. That's per the Census Bureau. All right. So then, renters accounted for nearly 80% of the nation's net household growth. Gosh, that is staggering. Well, let's look at the rent change and their factors in some of America's largest cities over the past three years, in Austin rents down 8% over the past three years, lowest anywhere. San Antonio minus 4% Denver minus 1% and then you got a couple cities, Phoenix and Dallas that are even no rent change the past three years because they've had some overbuilding. Raleigh, North Carolina, up 1% Nashville, Orlando, and Houston all with rents up 2% over the last three years. Still pretty modest. Jacksonville, Tampa, and Charlotte each up 3% Atlanta up 4% Miami also up 4% Los Angeles and Memphis both up 6% Seattle has had rent growth of 8% the past three years. Boston really with a lot of growth in tech jobs and not much new supply added. So Boston, Massachusetts, 10% rent growth. Philadelphia, 11% rent growth. New York City, famously not adding much supply. Rents are up 14% since 2023. San Francisco and Chicago leading the charge rents up 17% in both San Francisco and Chicago over the past three years. Now the biggest reason for the variability in rent change since this time it's largely the same reason for capital price change, for appreciation level, and that is the factor of supply. You know, remarkably, the eight cities that have built the least, they have the eight highest rent growth stories, and most of those are higher cost coastal markets that have high building regulation. I mean, sheesh. That's where approving new housing can take longer than choosing a speaker of the house, and that's how already expensive markets remained resilient. Keith Weinhold 5:57 Namely, I'm talking about places like New York, Boston, Chicago, and San Francisco, and then you've got these pandemic-era magnets like Austin, Phoenix, Dallas, and Nashville. What these places did is they attracted residents and developers along with them, but yet they've all got really slow rent growth stories, like I just outlined. So what really happened here in these pandemic-era magnet places, again, Austin, Phoenix, Dallas, and Nashville, is that builders showed up like food trucks at a music carnival, and eventually the construction wave caught up with demand. Then you know we got to look at the Sun Belt. A lot of people talk about the Sun Belt like it's just one market or one place, and of course that's not true because I just told you about how Atlanta and Miami rents rose 4% the past three years. Well, a number of other places in the Sun Belt just stayed about even, but it's really the tech hubs like Boston and San Francisco, that are just surging, really soaring with rent growth amidst the AI boom, because they've really been the beneficiaries of that. So yes, apparently even the people building our robot replacements then need a place to live. The robots themselves don't pay rent yet. It's rarely been more apparent that real estate is local when there's this 25% Grand Canyon between Chicago and San Francisco's 17% rent growth, and then Austin's 8% loss. And again, I'm talking about that period just over the past three years. Now rent declines-that's something that really doesn't happen very often. Keith Weinhold 7:48 They tend to be even more rare than a loss in overall home prices. But you know, rent declines-they can create buying opportunities. What happens is that softer rents-they pressure your current cash flows for sure, and that hurts, no doubt about it. But over the longer term, what that does is that discourages new construction, and then that sets the stage for tighter supply down the road. So that is really the rent growth story the past few years in the United States. We're going to discuss rents and prices some more, and then the excitement of the profound amount of new AI investment into a place where you might not be thinking about it in, and that is Memphis. Listen to what SpaceX, Anthropic, and Google are all in the process of doing there, and what that could do to rents. We'll talk to the premier provider of Memphis rental property, and they also place your tenant and they manage it for you, so that all you do is little more than collect the monthly rent check, and they also offer this in Little Rock, Arkansas, and more recently in North Texas, founded in 2002, Mid South Homebuyers they are one of America's original turnkey real estate providers, and you know they're quite possibly the oldest major provider that still operates today. We're going to talk to the man that actually sets the rents there, and in fact, Mid South is so renowned and respected that for a long time, if you wanted to own rental property from them, there was a waiting list that once reached 24 months, and frankly, in that scenario, investors would just kind of settle for the first property that became available-that doesn't happen anymore. There is no waiting list, and you actually have a choice now. Let's talk to this week's guests. Back on the show today, the Memphis-based team that has provided more. More income property to GRE listeners than anyone in history. They were first on the show with us almost 12 years ago on episode nine. It is Mid South Homebuyers founder Terry Kerr and director Matthew Vanhorn. It's a warm welcome back to the show. Terry Kerr 10:18 Thank you so much, Keith. Always love being on yo
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