Grant Cardone predicted the average US rent will almost double over the next decade — here's why the real estate mogul thinks that's a golden opportunity

New LendingTree data shows that fair market rents (FMRs) have surged by over $450 for a one-bedroom and $505 for a two-bedroom over the last five years, helping to validate Cardone’s forecast. One contributing factor behind the sharp rise in rents is the shortage of available units. As demand outpaces supply, renters face fewer options and have less bargaining power.

That’s not the only factor. Mortgages rates have reached their highest levels since 2001, with the average 20-year fixed mortgage rate at 6.79% as of June 2024. This puts homeownership out of reach for many Americans.

Despite surging rent prices, elevated borrowing costs mean renting is still cheaper in all 50 U.S. states, according to Realtor.com’s February 2024 Rental Report. The cost of buying a starter home is now 60% higher than renting one in 50 of the country's largest metropolitan areas.

Here’s a closer look at Cardone’s predictions and his underlying reasoning.

Temporary factors

Cardone believes this disparity in the housing market is highly unusual and temporary. “In my entire lifetime, the disparity between ownership and rent has never been this wide,” he says during his Vlad TV interview. “So if mortgage rates don’t come down, rent has to go up.”

Interestingly, Cardone shared these thoughts before the LendingTree survey was released that confirmed this exact trend. But just because both home and rental prices are higher doesn’t mean you can’t leverage those markets as an investor.

For example, there’s Arrived.

Backed by world class investors like Jeff Bezos, Arrived makes it easy to fit SEC-qualified investments in rental properties into your portfolio regardless of your income.

With less than 0.2% of homes passing Arrived’s selection process, when you browse their curated selection of properties, you can feel confident in what’s on offer in terms of value and expected return on investment.

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Not only does Cardone expect rents to rise, he expects them to nearly double within a decade. He estimates that the average rent in America is currently $1,800 and is set to hit “nearly $3,000” by 2034.

“This would increase the value of Cardone Capital portfolio by double," Cardone wrote on X, formerly Twitter. "If I'm right, this will provide an 8%-10% cash flow to our investors and 2X-3X return on capital investment."

Although the rental market is booming, this is largely because purchasing a home has become increasingly difficult for many Americans. However, there are still opportunities to invest in prime real estate across major U.S. cities.

The LendingTree survey highlights significant rent increases in cities like New York, Miami and Phoenix.

Rentals aren’t the only real estate that’s in high demand in these major metros.

Another way to get in these high-demand markets, without having to pay a high price for a home or a mortgage is through Cityfunds, which offers access to owner-occupied properties in these sought-after locations.

With Cityfunds, you can own a share of top-quality residential property in the city you love, benefiting from a diversified portfolio in some of the nation’s hottest markets including Miami, Los Angeles, Phoenix, Houston and more.