Morgan Stanley Dubs 2012 ‘Year of the Landlord’

More headlines announcing America becoming a “Nation of renters” sprung up this week. How bad could this be for real estate investing?

Rental vacancies have continued to drop and the bulk of new construction seems to be dedicated to multifamily apartments buildings aimed at capitalizing on soaring rents so have we really turned into a nation of renters for good?

Unlikely. Even though home ownership rates have slipped 3% from their previous high owning a home is still very much a part of the American Dream. Some may be being a little more cautious about grabbing their slice of the American Dream as they want to save more or improve their credit so that they can actually hold onto it this time but owning a home and investing in real estate are still way up their on almost everyones to-do list.

One analyst from Morgan Stanley recently dubbed 2012, “Year of the Landlord”. If anything this sounds like a fantastic thing for real estate investing. Would we like to see everyone buy a home? Sure. Though we also need renters too. If it is a great year for landlords it is a great year for all real estate investing.

You can either be buying and renting which provides cash flow and wealth building or you can be flipping houses to other investors using buy and hold strategies. Either way it is a win win. Plus real estate and interest rates are so attractive right now that you can lock into fantastic cash flow levels and sit on properties which are primed for appreciation over the next decade or two. A nation of renters? Bring it on and let the cash registers ring. Sooner or later people will get tired of making landlords rich and will want to claim their stake in the American Dream again.

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