Today I had a very interesting conversation with a man that called to ask me about one of my rental properties. The question that prompted me to write about it was “Why is your property still available when we found that all houses in the $900 rent range have already been rented?” Great question easy to answer. Primarily there are two reasons for which my rental has not yet been occupied. First of all, my previous tenants have just moved out a week ago and we just did the final walk through yesterday. Secondly, I am somewhat picky when it comes to pre-screening potential tenants. I will write more in a future post how and why I do such a “heavy duty” due diligence on this process.
My point with this article is that while the value of real estate has obviously gone down during the past 3 years the rental value has not. In addition, the market for rentals has increased as a result of people’s inability to buy and qualify for mortgage loans. Just think for a moment of the millions of people that have lost their homes due to foreclosures. These people all have families, kids, dogs – maybe mother-in-laws – so they most likely all need a roof above their heads. Need I continue to prove my point?
Now, fast forward to 2015. Yeah, you may say that’s far into the future but trust me, you’ll blink a few times and four years have gone by just like this. In 2015 I can guarantee you that either the dollar had collapsed or it’s close to collapsing. The four major world economic powers (China, India, Brazil, Russia) are working hard at making sure the U.S. dollar will seize to be the world reserve currency. Our government is also “working hard” at destroying it by adding unsustainable debt. In 2015 we won’t be buying a loaf of bread for $3. The $3/gallon gasoline price will be just in our dreams. In 2015 the middle class will be closer to the same standard of living of the poor class. What’s this got to do with real estate rentals? Just in case you haven’t yet figured it out, hard assets such as real estate may not be a bad thing for many to be invested in. You see, it’s all about positioning yourself TODAY for the future. And don’t be so sure the 401-K securities will be there for you when you need them the most!
There are three major needs that humans have: food, energy, and housing. Be invested in at least one group. Few of my friends including myself prefer real estate, it’s tangible and real, it’s a hard asset. You don’t want to be a landlord? Fine, you don’t need to but you can be an investor. That’s why there are property managers that will do just about everything for you. You want to place real estate in an IRA? Good, you can do that, too. You want to invest in Trust Deeds? Who says you can’t? Want to preview some ideas? Great, just click on my Amazing Deals tab and start thinking.
All in all, just do something, be proactive rather than reactive. Make sure you won’t be one of those people that will say “I wish I had done something about it but I didn’t”!