So what is going on? The facts. You hear about foreclosures happening daily and rates increasing each month. Banks are being tighter with money and loans. Houses are still being built. People still desire to have roofs over there head.
It would seem to me that the renting market would be growing. I have not really heard much about that though, through the media. Current renters are having a harder time buying homes because of the new and tighter restrictions on getting new mortgages. I assume that people that are foreclosing on homes are not getting new homes, but rather going to be moving into the rental market.
Renters in some markets are even being kicked out of the places they are renting because the owners of the homes are not able to make payments. So people that are renting need places to stay.
Many people I talk to about homes are very discouraging about investing now because “we have not seen the worst of the housing problems.” They see it only getting worse. Their advice is to wait until things bottom out. I will be the first to tell you that no news organization will tell you when we hit the bottom, because they will not know. Each market segment is different as well. Here in Raleigh we have not really seen a large trend downwards yet. There are a few builders holding homes but it does not feel like they are completely unfolding yet.
I have seen some people get homes that I thought were ridiculously overpriced for what I thought was market value. This to some is demonstrating a trend, though I feel they were just going with the hype. I am not big on hype.
So what is the move? I am leaning towards rental properties, with some hesitations. More houses are being built, you would still need to get a decent price on the homes, and you will need to be able to cover your mortgage each month. With a growing rental market and people having more difficulties getting mortgages, it seems logical. You might want to look into niche rental markets and/or stay away from rental neighborhoods. I feel that here are options.
There are people making money now and that will continue to strive during this downturn. They are thinking outside of the box and ignoring the hype. News organizations, Fox, CNN, CNBC, whomever, will not tell you where to invest. Seems they are only reactionary and stating the obvious. Now is the time to find good deals. If you are able to prosper now, you will probably blow up when the market recovers.
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April 18th, 2008 at 5:18 pm
Are renting any of your flips until the market recovers?
April 18th, 2008 at 8:47 pm
The one that was listed with photos on here might have to be rented. I had gotten the house with cash but will want to finance it if it does not sell within the next 3 months. If I finance I will need to rent it. I don’t really want my money tied up just sitting around (as it is now). So I might be renting things.
I fixed this house up a bit though and do not really want to have to do the same thing again, but we will see. I will update more when things change.