As substitute goods for one another, apartments and owner-occupied SFHs clearly have a reciprocal relationship. With all the foreclosures and other troubles in the residential market, are rents for multifamilies rising? If not, when do you anticipate this will occur? (Of course, this is somewhat market-specific. I am most interested in the greater Cincinnati/ Northern Kentucky area.)
I ask these questions as an aspiring investor. I plan to purchase my first 5-15 unit property within the next 6 months and do not want to buy based on rents that will come tumbling once the lending market eases up again. The opportunist in me also thinks that now might be the time to strike if rental income has not already begun to creep up.
I would greatly appreciate any advice you can offer on the market trends.
If you’re going to own a rental property business, it is absolutely pointless to try to time the market. I’ve been buying rentals for the past 4 years and I’m still buying. Rents are stable or creeping slightly higher and demand is good (here in Ohio). Learn the business and get started. If you’re going to hold for the long term, you’ll need to go through all kinds of markets.
I would say with rent increases you would be more bound to see increases in the commercial properties that are more income valued versus the 2-4 range that are more often than not owner occupied and tend to be tied to the same priniciples that value SFH. I’d be apt to agree with Mike and saying its foolish to try and time the market. Buy undervalue with guaranteed cashflow. If you are buying undervalue you can always sell for more later regardless of what the market does.
Thanks, guys. That was more or less the reply I expected (and wanted) to hear. Thanks for your time. Have a great weekend.