rental real estate

Discussion in 'Economics' started by blackjack007, Aug 22, 2007.

  1. with the problems getting mortgages now, it appears that rentals should perform well. during the past few years it was often cheaper to buy than rent, and with the easy credit, almost anyone could buy a house. but now a certain set of the population won't be able to buy anymore. add to that the foreclosures that will create new renters.

    i anticipate that occupancy rates will increase as will the cap rate on rentals.
  2. The property value is still vulnerable. Being a landlord during a bear-market isn't "free money".
  3. The irony is that for the best deal, you had to purchase before things tightened up. Pyramiding up while the market was hot would have helped too, using the lower fixed rates.

    But if you did that, then you'd have an edge over the other landlords in a market of increasing demand. Its already starting down in these parts.

  4. edpolton


    I agree.

    FWIW, I just raised my rentals 18% on new tenants and 12% on existing tenants, and not one complaint. Reading the local classified, it seems that other landlords are doing the same.

    During the past decade my average increase was 4-5% per year. An 18% increase would have priced me out of the market.

    I only have 10 units, so it is not exactly a scientific study, but it appears that there are plenty of takers. At least in my part of the country.

    I am in the Phila area.

    Just anecdotal. Take it for what it's worth.
  5. Where in Phila? I own a bit of property in the area and those seem like steep increases, unless the rents were low to begin with.
  6. edpolton


    Bucks County.

    It might be just the neighborhoods that I am in, but I have seen the rents rising faster than in previous years.

    Just my personal observations of other simular rentals in the area.

    Then again, the realestate market hasn't declined very much in my area either. Houses are staying on the market longer and there are more incentives, but prices have been relatively stable.

    At least according to the brokers I golf with.

    I just listed a property for sale, so I guess I will find out first hand.
  7. Renting is for idiot suckers.
  8. K-Rock


    Foreclosures will force rental rates down because the banks and vulture funds will rent them out to mitigate losses and/or for rental income until the next bubble. It's basic economics.
  9. Disagree, Foreclosures also put a lot of folks back into the rental market. The rental market has been very strong for the last year. I haven't seen rent increases of 12-18%, more in the high single digit range. But that's outstanding.
  10. K-Rock


    More people with bad debt and less disposable income to spend on rent.

    #10     Aug 23, 2007