I think it will be a banner year for deadbeat tenants to feast on newbie landlords.
With the ever increasing housing inventory for sale, you will see the old rent-while-for-sale come back into fashion (its seems to be in-style in SoCal these days). As a result, you will have these property owners turned newbie landlords will get eaten alive by that ever present class of professional deadbeat tenants.
I’m watching one of these unfold next to a property I own. Current owners overpaid and then after 12months decided they did not like the area and moved, but put their house on the market at an even more ridiculious price. Well, 15 months later its unsold so they recently rented out to 3 single, unrelated people (some with kids). Well, an animal house ensued until one of the roomies moved out. Then the electricity was cut-off and the place was vacant but still filled with stuff. Then a guy shows up last week to haul away some items of one of the roomies and declared they had moved out. I think the pile of burned laminate flooring in the backyard and the three holes in the drywall I could see through the window tells the whole story. The owners are going to need to order up a 40ft roll-off the clean the place up…the saga continues. :beer
Same here. Because houses aren’t selling,we’ve got really nice houses coming into the rental market. Much much too nice to put tenants into them.
Not only are the owners of those houses risking a very bad experience, but the rest of us, with regular rental houses are going to face a battle to try to get decent tenants.
Nobody is going to rent a nice middle class home if they can get an $800,000 McMansion with granite countertops, 4 car garage, and copper roof.
I’ve seen what sort of tenants some of the management companies rent to, so using a management company isn’t going to protect the inexperienced landlords.
I’m not seeing a flood of rentals here. In fact, I think any small increase in failed sellers renting their property is more than offset by the death of the real estate fad and the corresponding loss of newbies. The rental market here has greatly improved here over the past couple of years.
I am seeing REALLY nice homes being rented for PEANUTS around here.
I would NOT want to be renting residential property in this market. Tater hit it on the head…why rent a third floor in a 3 family when for the same money you can get a BRAND NEW CONDO!!! We have THOUSANDS of these things here. They all came on line right when things went bad, NONE are selling because there are giant FOR LEASE signs in front of them. This is KILLING the residential landlords around here. I have a friend who has been doing residentials for 20 years. Based on inflation his rents are actually LOWER now than they have EVER been. Meanwhile his taxes are up, his vacancies are up (due to the above) and he can’t GIVE a 3 family away in Providence.
My prediction for 2008???
We ALL start feeling the pain. Yea, I know, it’s not hapening here. Count your blessings but look over your shoulder every once in a while.
This mess is just getting started. It will get MUCH WORSE before it gets better.
Remember…when NO ONE wants it, and the media starts having stories about how all the “SMART PEOPLE DON’T OWN HOMES ANYMORE, THEY JUST RENT THEM”. THAT very moment will be the bottom of the market. WATCH FOR IT.
Another prediction for 2008 and beyond…Quietly, slowly, without many people noticing…American car companies are staging a HISTORIC comeback at this very moment…I’ll wait for the laughing to stop…all right RookieNYC that’s enough…
If you guy’s have some surplus money sitting around in a dead end mutual fund or have some cash sitting in a account earning nothing…BUY FORD and GM… Don’t believe me??? Go down BEFORE you invest a penny and DRIVE the new Chevy Malibu…I know, I can’t believe I just said that. (Porsche 911 turbo owner here) Just do it. YOU WON’T BELIVE IT… I DIDN’T!!
That car will drive home my point better than 600 lines here.
Mark my words…
LOL FDjake…don’t know about the buying the stock, but GM and Ford are realizing that they need to start making cars that look good and the Malibu is definitely one of them.
I agree with mike here, at least in Raleigh, my few rentals I own (5 now) rent before I even get a chance to advertise them. Mine are all low income rentals with almost unbeatable rents for the area.
another tough day on wall street…INTC is getting slaughtered after hours…down $3+ (%15) as I print this…I’m officially long a small portion of Nasdaq Index ETF QQQQ afterhours (adding this to my portfolio)…Bought it in the mid $45 range,tucking that away…It’s almost rescue time for Big Boy Bernake anyway…The markets are reacting accordingly to a very grim scenario playing out in the US…Everyone should read Pat Buchanan’s article on drudge report…It’s so on the money…I’m not a Buchanan fan but this article is straight up to the point and on the mark…
As for me I kept to my word and did a little more buying at the end of the day…Currently I have %15 of my funds invested in this mess and overall I’m slightly green believe it or not…Not to worry more bounces and blood shedding to come in these markets…Not for a newbie or someone looking to play it close to the cuff…SO STAY OUT OF THIS MARKET…This is a pro’s only market…No BS…I don’t want anyone following my lead unless they have decades experience in the markets…I post so others know my intentions and my ideas…
Well, I just got my first notice from a tenant who is moving from my nice middle class house in a nice neighborhood to a really fancy place for an increase of $100 a month over what they were paying me.
Our rents hadn’t gone up for almost 4 years. Then last summer was wonderful and rents took a substantial jump all across the board.
But now this winter, rents are gettig soft and there are some mighty nice houses getting dumped into the rental pool, assuming because they haven’t sold.
I just dropped rent by $30 apiece on my last two vacancies and it took nearly 2 months to get them rented.
Now I’ve got this nicer place going to be vacant, and I am looking at listings, and it is about right compared to everything except for three super nice houses that are worth twice as much that are being offered for only $100 more than mine.
There are a dozen nice town homes being offered for the same price as an apartment, which puts them in direct competition with my mobiles on acreage-- which is why I had to drop rent.
There are lots of houses being offered rent-to-own. I don’t think they are competition, yet, because the sellers are trying to get full price and high rent, or else low rent with an enormous down payment.
Those houses may get dumped into the rental pool if the sellers can’t get them placed as lease options.
all the more reason to buy right…if you need to, you can lower the rents and still cashflow. Eventually, when all those nice condo’s and SFH’s are trashed by renters, and the owners realize that they are losing money instead of covering their mortgages, those nice places will become availabe at a big discount.
Another good article that quotes the recent Wall Street Journal article about many Sovereign funds are buying up American companies that have been hammered down…
These foreign investors are stepping up to the plate in a huge way to chase returns…So far 3 top banking firms have taken in $90 Billion and that is just the beginning…I said this a few weeks ago here,smart money is placing bets on quality hammered down issues with great yields…The bad news is out for many of these companies and anything else is priced in…If it wasn’t for SEC regulations I would guarantee billionaires like Prince Alaweed would have bought more than %5 of Citigroup…
Point being don’t play in the gloom and doom…The weak get shaken out in times like this in real estate,equities,SIV’s etc…If you can average your way into a few quality names for the LONG TERM I honestly think there isn’t a better time to put a few dollars to work on quality companies…Foreign money is pouring inot this country…So sad what so many overleveraged/underfunded people did to this country…We are the laughing stock of the world…Japan and China have $2 TRILLION in cash reserves…America is deep in the red…Deep…This time will be talked about for years possibly decades to come…Michael Milken and the S & L crisis of the 90’s is nothing in comparison to these mortgage defaults…