Last week MSNBC and a research director for Harvard’s Joint Center for Housing Studies said that the market has definitely shifted to being a ‘Landlord’s Market’. What does this mean for real estate investing and how can you capitalize on it?
For a long period of time property owners were so worried about keeping some form of income coming in that there were many ridiculously attractive rental opportunities available to renters. However the stall in building and the glut of homeowners who have lost their homes joining a new generation looking for their own apartments has definitely turned the tables back into the landlords favor. Demand for rentals are high and real estate investors who are holding rental properties are now able to take their pick of renters and set the terms they want.
This is not just great for those getting into real estate investing now and starting to build a portfolio of rental properties but it is also great news for those who already hold properties and who can raise rents. Nationwide rents are expected to rise 5-10% per year for the next couple of years until inventory catches up again. Though tenants in many areas are already feeling the pinch when it comes time to renew their leases and find much higher price tags attached to them.
Higher rents mean better cash flow and more profits for real estate investing businesses and certainly make the great deals on foreclosures on the market even more attractive. However this news is also good for those who are just flipping houses too. It means that there is a larger spread in each property and presents some great marketing opportunities.
Those who continue to rent will continue to see their rents rise. So with fixed mortgage interest rates so low real estate investing companies should find it a lot easier to pitch the advantages of buying, especially if they are marketing to renters. It also makes rent-to-own deals also look much more appealing to consumers when weighing their options and deciding if they really want to sign up for another year of wasted housing payments at an even higher rate.
Summer is here and you can bet that a lot of people will be planning to move before the end of the season, so will you grab the opportunity and capitalize on it?