Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
Hey Guys & Gals, especially the folks that have been around for a few cycles of the RE market!
In the big scheme of things, I'm fairly new to investing. I've only been around post-crash and am blessed with a market filled with great cash flow opportunities in the residential (1-4 units) arena. As prices and rates start creeping upward, I can't help but wonder how this will effect my strategy down the road.
During the times when prices/rates are higher (which was the case before[boom], and inevitably will be again) and rents don't follow, what is a buy & hold cash flow investor to do?
Do people generally stop adding to their portfolio during these times?
Do they just keep the same criteria and have to scour/mine for deals harder?
Do they change their investment strategies all together?
I'm sure there are tons of views on this and I'd love to hear them!
I'd really appreciate the chance to learn from the experience and insight of those who came before me so I can better plan for my future. Please share your thoughts!
I think wise investor do all three of the things you suggested. While buy and hold may be your personal preference (it is also mine) knowing about other investment vehicles will let you ride you cycles where it's not plentiful in the buy and hold arena.
I think you could do several things with the cash: - pay down your current mortgages faster and save on interest payments you didn't spend.
- fix up current properties to obtain higher rent (ROI on a $10,000 kitchen would be in direct rent increase?)
- Put some cash in with a hard money lender and get a nice return?
- Invest with someone reputable who does flipping?
I will always be looking for deals in my market, even if I don't have the money. If nothing else you'll notice when prices go up or down and it will help you keep your pulse on your area.
If you still have cash leftover and you're looking at other investment vehicles the old mantra of "zig when everyone else zags" comes into play. You should always be thinking of changing your investment strategy since the market changing is the only constant in investing.
What investment gets cheap when mortgage rates and home values are higher?
Albert Hasson Help me understand this. How is it that the value of your rent is half what it used to be? Did you lower rent?
The point I was trying ro make is it no longer makes sense for me personally to buy anymore long term rentals. While rents have stayed constant, the cost of the homes have about doubled from their bottom so return on investment is about half of what is was a few years ago here in Phoenix.
I agree with Dawn A. and Jenkins Ramon about the rules for city employees. One of my tenants is currently a public school teacher in Milwaukee and that was one of the main reasons they were looking in my area. When they moved in over a year ago, she needed to live in the city limits. I know they are paying attention to these laws as they are more interested in moving towards the suburbs. It will be interesting to see how these laws (or lack of prosecution) will effect the rent in Milwaukee. That has me considering more strongly investing in the suburbs, particularly the northern ones. Only problem there is the buildings are more expensive