Soaring Rents
Rents are up around the U.S.:
In the quarter ended Sept. 30, the average advertised rent reached $978, up 3.9 percent over the year-ago period, according to an analysis of 75 markets by real estate research firm Reis Inc. in New York…
Meanwhile, the nationwide vacancy rate for rental housing dropped to 5.4 percent during the quarter from 6.7 percent in the same period of 2004.
The ‘traditional’ model of building wealth through real estate is based on buying properties that have good cash flow, building equity as you pay off the mortgage, and gradually increasing the size of your portfolio. The current market will only get better for those types of investors as prices fall and rents rise.
On the other hand, investors who only have one strategy for making money, i.e. rehabbing and selling, will have to adjust quickly and learn new strategies. The ones that refuse to see the light or the ones that don’t have enough cash to weather the changes in the market might end up like this guy.