Challenges and Quandaries: Markets in Flux
Anyone who follows the global housing market to any degree knows that we are in a period of tremendous uncertainty today. Indicators of new growth and accelerating recovery one month can be followed by news of stagnation and unattainable rents the next. Lists of the most expensive cities in which to rent often overlap with lists of the world’s most affordable cities. Kiev and Mumbai, for example, regularly appear on lists of both types. Trying to comprehend any economic issue on a global scale is challenging; trying to make sense of global markets for apartment rental seems an impossible task when contradictions abound. Nevertheless, there are resources that can help you make sense of it all.

Of course, many of the most expensive cities for apartment rental are well known: Singapore, Tokyo, London, Paris, Toronto, Moscow and New York, for example, have been topping such lists for decades. Everyone pretty well knows the score in such locales: there are amazing apartments available, from classic beauties to modern technological wonders, and the renter will pay plenty for them.

Many additional North American destination cities have continuing high demand and rents to match. Such cities include Boston, Los Angeles, Seattle and Vancouver. European and East Asian rental markets are just beginning to surge upward after a long malaise caused by global economic uncertainty. Look for opportunities to get into those markets now before rents ascend out of reach. Pay attention, too, to rising markets, like major African and Middle Eastern cities. And keep a close eye on Brazil, which has thus far lagged behind the global rental market recovery rate.

Insiders’ Secrets to Help You Find Value
In all areas of real estate, including apartment rental, finding value is a subtle, challenging process. Obviously, an affordable, well-maintained unit that appeals to a renter’s sense of beauty and comfort is inherently high in value to that person. One that yields high rental income while requiring little maintenance is just as obviously a great value from a landlord’s perspective. But things are rarely that clear in the vast scale of global markets.
One interesting bit of data that can be found by those willing to do some serious research is information on the rental profit margins for apartments in various locales. These numbers show how much of each rental payment is landing in the landlord’s pocket as profit. A high profit margin indicates immediately a market that offers great value for property owners, but low value for renters. In plain English, properties in such a global market are overpriced from the renter’s point of view. Conversely, a low margin means that property owners will find most of the money they take in as rent going right back to meet overhead, such as utility costs, insurance, etc. Such markets are great finds for the renter, as it means one is paying very directly for the value of the home. On the other side of the coin, any such market will present real challenges to property owners, who will see apartments as under-priced and undervalued.

Ultimately, apartments are homes, and therein lies their greatest value. Exploring the global markets for apartment rentals can be fascinating and potentially very profitable. But never forget that one cannot put a price on charm and comfort.