You’re familiar with these expressions – what goes up, must come down. Trees don’t grow to the sky forever. Yet residential real estate investment is red hot, with no signs of slowing down. Investors who grabbed single-family homes at bargain prices during the Great Recession are raking in handsome rental incomes, enjoying cash flow while building equity.
The media continues to promote the idea that being a landlord is a no-fail path to riches. This view is bolstered by the fact that historically, real estate performs well. (As long as one remembers that you make money when you buy wisely!)
As the volume of distressed property continues to fall around the country, and entry-level home inventory dries up, it seems unlikely that individual or corporate investors will sell anytime soon.
However, rents are slowing in some U.S. metros, as newly-constructed multi-family projects hit the market. Some U.S. cities are experiencing population loss due to localized economic and demographic conditions. National-brand retail stores are closing in record numbers, which will lead to job losses and increased vacancy rates in commercial real estate. All of these things could have highly-localized effects on housing demand.
The most unpredictable paradigm shift may come through income tax reform, which could fundamentally change how itemized deductions work, or if they’re available at all. It’s too soon to say if or when such reform will happen, but the chance alone could change investor and home buyer behavior.
In the meantime, some investors may choose to sell residential investment properties for personal reasons – to cash out and enjoy retirement, or to free up funds for new investment opportunities. Others might decide they’re sick of dealing with tenants, or that the costs of professional management, repairs, property taxes and so on have become untenable.
Real estate agents who are hunting for listings should prospect investors in their markets! RealSupport can help you with customized marketing materials, such as direct mail postcards and letters, as well as email campaigns and listing presentations. Contact us today for your personal consultation!
Copywriting & Marketing Specialist