Great article in the NY Times, essentially saying (YAY) there's gonna be more renters!
is this a positive for you ?
Good article. The northeast and south are generally quicker to build compared to the midwest and west coast. Not surprised about the rental increase either as former owners are taking it easy(after all of the foreclosures) and many retirees are choosing to downside and rent. Great share.
@Jay Hinrichs More renters, is good news to me, is there a downside to that?
the unintended consequences is you take SFR stock that had intrinsic values as owner occ areas.. turn them into rental areas and the values just never move.. they sell for what an investor will back into a cap rate or return on investment.. Now in some markets were rents sky rocketed last 5 years investment properties moved up with them.. but in markets were rents are relatively stable you will not see much movement in value as your only exit is to a landlord and one that is trained on BP to boot and backs into what they will pay for a specific cash flow. Definitely limits your upward growth in value and your exit ability.
now if your going to buy homes and Never sell them.. or your buying multi family that's another matter
@Jay Hinrichs I see what you mean so for the buy and hold strategy this is great news but if Im purchasing for equity than this is not so good news. But I would think than that the best insurance against this is to buy in neighborhoods where its unlikely to to turn "rental"but that being said it'll probably be in "A" neighborhoods where its harder to get deals.
Also in your experience multi-fam's (even in good neighborhoods) don't appreciate well?
multi's go up as rents go up.. or investor decide to get into the space like they have the last 3 years driving down cap rates.
I dig the buy and hold strategy to capitalize on this trend. I doubt it lasts though. In the next decade we will see a huge shift in property ownership from Baby Boomers to Gen. X'ers by way of Trusts and Probates. I have already begun putting the latter on smash!
@Jay Hinrichs Thanks for that insight.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!