As many of you who read my blog know, the odds of getting your mortgage payment back in rent are ridiculously small in most cases. In fact, for several years, it was almost laughable to hope for such a return...until now.
The Antelope Valley was one of the areas in southern California that was hit the hardest by foreclosures. As a result of this unhappy reality, prices of homes here dropped like a rock. Our market has become inundated with short sales, foreclosures, auctions, and every other type of Realtor's nightmare that you can conjure up. There are homes that sold for over $250,000 just a few years ago that are now on the market for around $89,000.
Sounds horrible right? Not for the investors.
The saying goes that every cloud has a silver lining. In this scenario, the silver lining on the foreclosure cloud is the rental market and investment opportunities. A side effect of the massive foreclosure rate is an increase in the number of renters. Just because someone went through a foreclosure, that does not mean that they will no longer need a place to live. All of these people who got their homes by utilizing some kind of sneaky loan program are now having to turn towards the rental market once again. As a result, the massive surplus of rental homes in the area is beginning to shrink. Rental home prices are going up, and vacancy rates are coming down!
Here in the Antelope Valley, the market drop has made a tremendous impact on how investors are looking at the area. For the first time in years, homes can be purchased and rented out for MORE than the owner will pay in insurance, property taxes, and mortgages combined! Due to the fact that I work for a property management company, I have the ability to track rent prices as they rise and fall. As a result, we as a company have been able to help several investors in their quest to find properties that are capable of producing a positive income each month.
Just because the market has taken a downturn, that doesn't mean that all hope is lost! Hope is always to be found if you look in the right places. For those investors out there, take a look at the southern California real estate market. You just might be surprised to find that there are amazing deals to be had and money to be made!
Classic Property Management...finding the silver lining in a cloudy market. For more silver linings, feel free to check out our website by clicking on the Classic logo to the right!