The three myths of the rental housing market

In Mexico, the housing for rent It becomes a fundamental option for people who cannot get a property or who are looking for a temporary stay due to their situation; However, there are different myths within the subject of leasewhich makes real estate investors look favorably on this housing segment.

According to official figures, in the country there are 5.8 million rented housing, of which 54% have a current rental contract, that is, they are within the formality. The main reason for rent a house It’s because you don’t have access to credit or resources; for the ease of moving; because the monthly payment is less than a mortgage or because a person is not interested in buying.

For the proptech Abode One, focused on providing legal solutions in terms of leasingthe market of housing for rent It has interesting potential for real estate investors, since leasing, together with other real estate services, is the second source that generates more resources within the housing sector, just below housing construction.

“Thanks to technology and the dynamism that the market has had in recent years, even due to the effects of Covid-19, today much better returns are obtained when investing in a rental property,” said Diego Llano, financial director of Dwelling One.

For Armando Huerta, commercial manager of the firm, technology in this sector has gradually made the business more profitable than before, not only for owners, but also for real estate professionals and even more accessible and safe for tenants.

In this context, Morada Uno explained the three beliefs of the sector that have to be demystified:

1.- Closing operations is complicated

According to the firm, in the real estate industry, advisers prefer to close purchase and sale operations over those of rent a housedue to the relationship that exists between the commission and the work involved in both processes.

However, the reality is that with technology it has been possible to simplify the process, with minimum requirements, times and safety factors. For example, the advisors that sign alliances with proptech companies, allow to capture and place a property faster due to the elimination of the guarantee requirement, they have complete information about the tenant and the payment of one year rents.

“In short, technology empowers the real estate consultant, raises their level of service, removes friction from the operation, gives transparency and security,” said Morada Uno.

2.- It is not fast or easy

For Morada Uno, one of the most common myths in the sector of housing for rent it is that they are neither quick nor easy operations. However, the firm stressed that regardless of the level of experience, the advisor can complete an operation of this style in less than 24 hours, thanks to technological tools.

According to the firm, there are currently platforms that allow you to investigate a tenant, generate contracts and even carry out the electronic signature in a few clicks.

3.- The size of the market

Another of the most common myths of the housing for rent It is that it is a very small market, compared to the sales segment, but with the changes that have occurred since the pandemic, there seem to be signs that show the opposite.

According to Morada Uno, the pandemic slowed down the buying and selling market, while the rents had more dynamism.

“Mexico City in particular received a lot of people from other cities, many foreigners and digital nomads. The rental market grows much more than that of housing construction and this trend will predominate in 2023,” said Morada Uno.