Why? For one thing, this may be the year of the landlord.
Tom Royce at The Real Estate Bloggers cites Michael Cook’s investing posts. I would draw your attention to Jeff Brown’s investment advice as well. This might be your year to pick up a few buy-and-hold rentals units.
Technorati Tags: investment, real estate, real estate marketing
Marc Brinitzer says:
Greg,
I think this may become the decade of the landlord. Unlike a temporary bulge in inventory due to foreclosures, tighter lending guidelines may have a longer term effect. Couple that with the number of folks who’ve lost homes and now have damaged credit, bankruptcies, and depleted cash reserves, and the ratio of renters to home owners may favor smart investor/landlords for some time to come.
The key is longer term thinking, buy and hold. A little more patience may be required–or a decent sized down payment–before properties cash flow. I can’t see too many flips working out well in the near future. And folks shouldn’t be tempted to use neg am loans to create the appearance of break even cash flow.
March 22, 2007 — 12:30 pm
Greg Swann says:
This has been my take since late 2005 for the Phoenix area. There was a point that winter when you could stand on a street in the suburbs and watch the For Lease signs come down one-by-one.
March 22, 2007 — 12:58 pm
Marc Brinitzer says:
I guess the wild card here in Sacramento is how many people can afford to hold on to these homes long enough to rent them out. Not enough to threaten a landlord’s position for anything other than the very short term.
My agents are telling me that somewhere around 40% of the resales on the market are vacant now. I guess that tells a story, doesn’t it.
March 22, 2007 — 1:06 pm
Greg Swann says:
Check. As a counter-indicator, one of my out-of-state investors is selling his tenant-occupied SFR to a local investor who is buying — count ’em — 200 homes for cash. The ROI after expenses is worse than an HSBC passbook savings account, for now, so the man must be banking on something. As always, our population-growth figure are astounding.
March 22, 2007 — 1:13 pm
Marc Brinitzer says:
Just like stocks, it’s either current income or long-term appreciation. Guess it’s clear what he thinks. And he’s putting his cash where his mouth is. You have to admire that.
Yes, I’ve read the population growth stats for Phoenix. As a Seattle boy by birth, I can’t understand how anyone could deal with that climate. Rocks, rubble, and heat! Sacramento is bad enough.
~;>)
March 22, 2007 — 1:41 pm
Greg Swann says:
You forgot lizards, scorpions and bad drivers from states further west. 😉
It’s rainy today (bleah!), but the orange blossoms have been in bloom for about eight days. No place more like heaven…
March 22, 2007 — 1:46 pm
Marc Brinitzer says:
You must have hijacked our weather! We seem to have skipped winter almost entirely.
Heaven? Give me 65 degrees and a slight drizzle…oh, and girls with beautiful skin!
March 22, 2007 — 1:52 pm