MSNBC recently posted an article on what it calls a ‘generation of renters’ that has been spawned from the housing crisis. This may not sound like a good thing for those in the real estate investing business, but it does have many advantages.
First let’s consider why we are really faced with a generation of renters. It can no longer be just because buyers are waiting for the bottom of the market, we know that many areas have already turned around. Sure some may be afraid that home prices may fall a little further, but it is more than that. Many potential buyers of course can no longer get mortgages, but one of the biggest changes is that many just do not see home ownership as being appealing any more. Some are opting for a more nomadic, jet set lifestyle if they can afford it, while others have just decided it is better to rent. Some may think this could make real estate investing more challenging, however it also presents lots of opportunities for long term profits and cash flow.
According to a study of census data by the Associated Press and Harvard’s Joint Center for Housing Studies the number of renters is expected to double in the next four years with the addition of 3 million new renters to the market. For those in the real estate investing business this means a huge, rising demand for rentals that will bring higher rents, better quality tenants and long term tenants providing stable cash flow.
For real estate investing companies in vacation and resort areas this change in mentality also presents opportunities for flipping properties at premium prices as fractional ownership deals and raking in juicy amounts of cash flow on seasonal rentals. Technically there is no bad market for those in real estate investing, it is just about knowing how to work things to your advantage.