Friday, February 8, 2008

Home Rental Prices Are On The Rise

If people can't get loans to buy homes, they're forced into the Rental market...whether they like it or not!. Hundreds of thousands of potential home buyers have been shut out of the home buying experience as a result of the Sub-prime crisis. Foreclosures have forced banks and mortgage companies to tighten up their Underwriting guidelines and abandon the once sought after Low to No Documentation loan programs. Although this is quite unfortunate for those wanting to buy a home, it provides a JACK POT of opportunity for investors with homes to rent.

Over the last 12 months, I've noticed a 25% increase in the number of calls I get when I advertise a vacancy. I've also noticed an increase in home rental prices from my competitors as more and more people compete for the rental home inventory that remains. The volume appears to be coming not only from those unable to get a loan, but from those losing their homes to foreclosure.

Apartments are an option for renters, but homes offer many more advantages such as increased square footage, yards for kids to play in, and garages to park vehicles or provide storage. Rental Homes also offer renters the possibility of future home ownership through Option To Buy programs. These programs often give renters a credit from rents paid toward the purchase. Apartments just can't compete with that.

This a great time to buy an investment property for purposes of generating rental income. The added benefit will be the increased gain in property value as we move into the next appreciation cycle. This is a Win-Win situation for most investors.