With Home Ownership at a 10 Year low, more people are renting. It is only logical, with the country having a record year of foreclosures for the third yearin a row. Where do these families go? They have to rent since trying to buy a home with a foreclosure on your credit score will limit most to not getting a mortgage for a few years. Lenders are not as flexible with credit, hence even without having a foreclosure, many people just don't qualify with the new underwriting of mortgages. So, home ownership is dropping.
With renting increasing, and the values of homes decreasing, buying an investment property as a rental is a great way to gain long term wealth. Not with the craze in the middle of last decade, Flip This House. Real Estate has returned to a long time investment, probably with modest increases of about 3% a year.
Talking with investors, this is what they have been waiting for. Being able to purchase homes, rent them out, and have a positive cash flow. Rents are always regulated by what the economy in the region is able to pay. Here in Central Florida, Walt Disney World is the largest employer and pay is not on the high side. So rent here in Central Florida was always kept affordable. When the market was booming, home values were rising so fast and so high, a positive cash flow could only be obtained if a substantial down payment of about 50% was made. This being said, the return on investment was too low and investing in rental properties was not a good financial strategy. Well, the tide has turned and now is the time to load up your Real Estate portfolio.
Get out and take a look at some Bank Owned Foreclosures and start investing. It's the right time.
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