Analysts Call Rentals the Next Hot Market
June 18th, 2011
Economists and real estate industry leaders are pointing to rental real estate as the next “boom” market, according to Stan Humphries, Zillow’s chief economist[1]. Humphries spoke to the National Association of Real Estate Editors yesterday. According to Humphries, 1.2 to 2.2 million people are “transitioning out of homeownership and into the rental market” after going through foreclosure or other life changes that have led them to opt out of owning property. As a result, more people are moving into apartments. In fact, only one place in the country is not seeing demand for multifamily properties – Las Vegas. Literally everywhere else, according to vice president of research and analysis for MPF Research Greg Willet, “is headed for higher occupancy levels and higher rents.” Willet calls it “a rising tide.”
However, with a new predicted “boom” sector of the market, some analysts fear that overbuilding could create a problem just as it did in the residential market several years ago[2]. Economists like Stacy Hunt, director of Greystar, hopes that it will not be too easy to get financing for new projects so that there will be a “governor on overbuilding.”
Do you think that rentals are as good an idea as these experts do?
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[1] http://www.chron.com/disp/story.mpl/business/7616100.html
[2] http://www.mysanantonio.com/business/article/Next-hot-market-Apartments-1429437.php
June 18th, 2011 at 8:29 AM
I’m buying rentals again after taking a break from them for the last 7 years. I’m particularly interested in the South FL market, because I know it well and because the rent to purchase price ratio is just shy of 2% and that’s HUGE!
I’m buying REO’s with cash and then refinancing with Private Lenders so i can roll the money forward. My goal is 50 houses over the next few years.
I plan to hold them long term as part of my retirement portfolio.
I continue to flip houses on a daily basis and fund flip deals for others, also on a daily basis.
I also continue to focus on building my mini-storage holdings.
Great article Carole. I like the work you do.
Cam
Thanks for the kind words and great information, Cam! ~Carole
June 18th, 2011 at 12:17 PM
I think that 70% + of the general public will become renters.
For an investor, I think that rentals are a great way to go for monthly cash flow ! However, to buy and hold with hopes of making an equity killing on the real estate itself, at a later date ?…I do not think so !
Thank You, Gary
June 21st, 2011 at 3:49 PM
I think the only reason for the rental boom is because of the foreclosure crises. Why? many consumers have lost their homes, via, foreclosure, thus making their credit plummet, which leads to lower score, which make most not eledgerable by fico standards to acquire a house, which comes full circle, for the investors. They buy, rent, make a profit. This is all the same, but under a different roof. What you think?