The years of 2004-2006 were dreadful for the rental market. I witnessed a continuing decline in both the rental rates and the availability of qualified renters. We literally had section-8 tenants move out and buy a house. While that was great for them the fact that anyone with a pulse could get a mortgage really killed the rental market.
Home ownership skyrocketed in the US to all-time highs! Unfortunately many people got suckered into ARM's or even interest only mortgages. Now the pendulum has swung the other way. Mortgages are getting harder to come by, lenders are getting scared and the market is flooded with vacant homes.
On the flip side what was a dreadful rental market is making a remarkable comeback. In the past two months we have rented more property in the Kansas City market than we probably did all year. While many of those who have been forced into foreclosure are leaving homes they owned, they have to live somewhere. The opportunities for investors are fabulous. All that available property has made sellers quite eager to negotiate.
Areas like Lee's Summit, MO are ripe for the picking, while still in high demand for home buyers, fewer can qualify to purchase. Prices are lower than they were even a year ago. Most prognosticators of all things economic say this is a temporary slow-down. I've seen projections from many sources including NAR that give this a three year bubble. So buy low, rent for a while and sell high!
Another interesting trend is that we are gaining more and more listings that have been on the market for months. Sellers simply cannot take the losses they are looking at with trying to sell in this market. So we are leasing their homes while they wait for the market to improve. This has created some unusual new types of rental property. While normally the higher end homes are reserved for buyers, we have been leasing them like crazy to professionals who are coming to the area and want to see what the area is like before they buy. They seldom cash-flow but if the seller can at least get enough rent for the interest, taxes and insurance then everything else is just equity building. Think of it as funding a retirement account.
I penned an article about the benefits of renting vs selling your home . I have had many comments on that article and it has convinced many sellers that this may not be the time to sell, they do have another alternative.
If your are interested in renting vs selling please visit that link and see if it is relevant to your situation. Should I sell my house or rent it is a question that is getting asked often lately.
Ben Edsall http://www.turnkeyproperties.org