Increasingly consumers are recognizing that at any rate for right now they're a great deal better off in financial terms renting than buying. This is without doubt very different from the past when most consumers recognized that the perfect financial option is to purchase as opposed to rent guaranteeing that their money would go toward creating equity in a home.
Today that's definitely not the case, however. Whilst rents have continued to climb in many areas, consumers are nonetheless finding they're often in a position to rent for much less money than what they would pay for a recurring mortgage payment on a matching property. In some cases, renters have the ability to save between 40% and 50% by renting as opposed to purchasing.
One of the reasons for this can be that in some areas, property values rose pretty steeply. Right now, purchasers who snatched up those properties without blinking have discovered they have to now sell. The problem? They must sell the properties at the prices at which they bought them two years ago to recoup the balance they must pay back on the mortgage. Renters just are not willing to pay a higher price than a house is worth.
Even renters who're able to qualify for mortgages just don't really feel as though they're getting enough home for their money, particularly when they can often rent a comparable and in many cases larger properties for much less money.
Because of the shifting market, many industry experts are fast to point out that today the market is no longer a seller's market and it isn't really a purchaser's market either. Rather, it has turned into more of a renter's market.
Other renters are putting on hold the concept of purchasing as they're afraid that prices have not yet hit the lowest point. They are primarily afraid that if they buy a property right now it is probably not worth equivalent amount merely six months from now. They think it's far more wise to hold back and see exactly where the property market will land before they look into purchasing a home.
Whilst some areas are experiencing a deficit in availability of rental properties, in many other areas property owners have acknowledged the logic of holding off on selling their homes. They, too, are unwilling to sell off their properties now when it appears far more sensible to hold back and then judge when the market will become stable. To help make ends meet, many of these property owners are willing to rent out their properties to the many renters lining up to capitalize on the opportunity. Even properties which are on the market for sale are likewise available for rent. Whilst renters must acknowledge the truth that the house whereby they're living must be available for showings, they nonetheless encounter the trade-off is pretty worth it.
Would-be investors who tried to get in on the quick profit potential of flipping properties have also discovered that it makes a great deal more sense to rent out their properties today as opposed to attempting to sell them. In some cases, investors are finding out they simply do not have any other options because they must meet mortgage payments every month and are unable to promote their properties. In some cases, this implies renting the properties at a loss, generating a negative cash flow.
In fact, this situation has grown to be so much of a problem that landlords in several niche markets are finding they have to reduce rents in an effort to create even a minuscule amount of cash flow. These investors have immediately discovered that it is far better to rent instantly at a loss than wait a few months to try and acquire the amount of rent they really need. Though landlords are often upside down on most of these properties, renting them out has proven to be the safest method; at least for the moment.
Milan Doshi holds regular talks on the topic of investing in property. If you want to know what to invest in property, then come to his Property Intensive seminar organized by Wealth Mastery Academy that has helped opened the minds of many to the opportunities available in property investment.
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