{"id":10037,"date":"2009-10-12T07:49:53","date_gmt":"2009-10-12T14:49:53","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=10037"},"modified":"2009-10-12T07:49:53","modified_gmt":"2009-10-12T14:49:53","slug":"capture-appreciation-and-cash-flow","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10037\/capture-appreciation-and-cash-flow\/","title":{"rendered":"Capture Appreciation and Cash Flow"},"content":{"rendered":"

The advantage of investing in today\u2019s market is the potential to capture appreciating assets that provide strong cash flow. These investments are the holy grail of real estate investing. In strong markets, these properties simply don\u2019t exist, but in down markets, a smart investor can pick out these diamonds among the rough.<\/p>\n

Consider the price declines in many areas of the US. Housing prices in the strongest metro areas like Los Angeles, New York, San Francisco, etc. have dropped in the double digits. But what have rents done over that same time period. Honestly, they have dropped as well, but not nearly as much. Rents did not experience the same run up in values as home prices because renting or owning is a zero sum game. As more renters decided to become owners, owners of rental units had to lower or at the very least not increase their rental rates. Rent growth slowed and owner-occupied values soared.<\/p>\n

Now the pendulum is swinging the other way. Many buyers are returning back to the rental market by choice or by force. Rents are still experiencing some stress because of the increased inventory of rental units and shadow rental units (people renting their home or rooms because they cannot sell). Renters are moving back home with their families or doubling up. Despite these negative signs, rents should not be expected to decline at the pace or to the degree of the housing market.<\/p>\n

This presents an interesting opportunity to buyers of small multifamily or single family homes as rentals. Areas that made no sense to buy for rentals now make sense again. Some areas in LA, San Diego, New York City, etc. should be re-examined. Buyers in these markets have a rare opportunity to buy cash flowing properties with the prospects of double digit appreciation. Even if that appreciation doesn\u2019t come back for five to seven years, the buyer has the luxury to wait because of the cash flow coming off the properties.<\/p>\n

The combination of low interest rates, level rents and Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The advantage of investing in today\u2019s market is the potential to capture appreciating assets that provide strong cash flow. These investments are the holy grail of real estate investing. In strong markets, these properties simply don\u2019t exist, but in down markets, a smart investor can pick out these diamonds among the rough. Consider the price […]<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-10037","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":190,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/190\/owning-versus-renting-in-the-long-run-owners-appreciate-their-returns\/","url_meta":{"origin":10037,"position":0},"title":"Owning versus renting: In the long-run, owners appreciate their returns . . .","author":"Greg Swann","date":"August 9, 2006","format":false,"excerpt":"Searchlight Crusade has a compelling comparison of the financial benefits of buying a home, as opposed to renting:Once you have bought, you step off of that one way escalator of rising rents. Rents increase at a yearly rate about comparable to inflation in most cases, and rents never drop. I\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1037,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1037\/interest-rates-and-the-small-investor\/","url_meta":{"origin":10037,"position":1},"title":"Why Small Investors Should NOT Stress About Interest Rates","author":"Cooksquared","date":"February 12, 2007","format":false,"excerpt":"Interest rates and the small investor, is there really an effect? Beyond the obvious cost of borrowing, I have wondered if the small investor really notices a change in the Fed Funds rate. While I am not going to make the same mistake of asking you all to humor me,\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1127,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1127\/real-estate-investment-theories-that-can-actually-help-you-make-money\/","url_meta":{"origin":10037,"position":2},"title":"Real Estate Investment Theories that can Actually Help You Make Money","author":"Cooksquared","date":"March 9, 2007","format":false,"excerpt":"Some of you may have noticed a drop in my postings over the last two weeks. The driver behind this has been mid terms. For those of you who don't remember what that was like when you were in school, imagine doing all of the work you do in a\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":155,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/155\/how-to-turn-100-into-27000-in-eight-years\/","url_meta":{"origin":10037,"position":3},"title":"How to turn $1.00 into $27,000 in eight years . . .","author":"Greg Swann","date":"July 29, 2006","format":false,"excerpt":"That sounds like a late-night TV pitch, but it's actually possible in residential real estate. Housing is distinct from other investment vehicles in important respects. Unlike securities, real estate is a hard asset with an enduring intrinsic value. There are huge tax benefits accruing from owning real property, either as\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5017,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5017\/point-counter-point\/","url_meta":{"origin":10037,"position":4},"title":"Point \/ Counter-Point","author":"Sean Purcell","date":"October 16, 2008","format":false,"excerpt":"Michael Cook wrote a thought provoking post earlier entitled What Happens to the Early Worm.\u00a0 So thought provoking that I found my comments drifting to post length.\u00a0 So how about a little point\/counter-point? Michael, a very detailed and thoughtful post. I would not disagree with you that cautiousness is a\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":108,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/108\/phoenix-apartment-rents-up-74\/","url_meta":{"origin":10037,"position":5},"title":"Phoenix apartment rents up 7.4%","author":"Greg Swann","date":"July 20, 2006","format":false,"excerpt":"Site cite: Las Vegas Review-Journal. Rents are up and vacancies are down across the board in rental housing. The Republic could take notice, except it's too busy telling itself that real estate investors cannot possibly know what they're doing. 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