Being a Landlord Today It is the Best of Times

By Jennifer Minge

Every time you turn on the television or read a newspaper, you hear nothing but doom and gloom for the real estate market. Nationwide housing values have declined twenty percent, vacancy rates are at historic highs, and foreclosures are at an all time high. The logical mind would tell you to avoid the real estate market in general and specifically avoid the rental property arena. But Warren Buffett always said it was best to buy where there is blood in the street. Taking the advice of the richest man in the world is exactly what savvy rental property owners should do.

Nationwide property values have declined 20% in the past two years. On top of that the number of property foreclosures has increased drastically. Banks are dumping properties at pennies on the dollar to get them off of their books. Real estate investors are able to purchase properties at prices as low as 1/3 of the market price just a few years ago.

Landlords who purchase properties at rock bottom price are entering the rental market with a distinctive advantage of their competitors - greatly lower mortgage payments. In my market multi-unit investment properties sold for $320k two years ago. An investor can purchase a bank foreclosure for as little as $120k. Their mortgage payment is only $600 compared to the buyer two years ago who is struggling with a $1,500 monthly payment.

These new landlords are able to compete more aggressively on price and undercut their competitors to quickly fill their vacancy. The lower mortgage payment still presents them with a greater monthly cash flow than their competitors. Landlords who are able to buy at these reduced prices today realize that they need to just wait a year or two for the market to rebound.

Once the market recovers and market values approach the value that they were two years ago, these landlords will be able to sell and realize a nice profit on their investment. They only need to realize that they need to overcome the challenge of keeping their investment property fully rented during this time frame.

ABOUT THE AUTHOR

Free information on how to retain tenants.
For more information about real estate investing visit my website at InvestInRealEstate101.
For access to 3 of the greatest personal development books every written visit Your Free Gifts.

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