Houston is in a very unique position right now. Perhaps this is the case throughout the U.S. but since I practice Real Estate here in Houston, I can speak only for Houston.
We're running low on rental property.
In recent years, out of town investors were lured to our fair city and encouraged to pay astronomical prices for property only to discover that the lease revenue they were promised didn't deliver. What was the problem?
The problem was that it was a seller's market. The demand for property was high and the number of qualified buyers was high. Everyone qualified to buy, so if a lessee felt the asking lease price of a property was too high, they negotiated the price down. The landlords had no choice but to comply.
The tables are turned now. Fewer people are being qualified for loans and there is some uncertainty regarding how the economic woes this nation is facing will affect Houston. So, that means we have a greater number of people needing to lease property. And since these lessees no longer have that buying power, they no longer have negotiating leverage. Additionally, there isn't enough rental property to meet the demand. This is especially the case in the inner loop area.
There is another goody in it for the today's investor. Since we have fewer qualified buyers chasing a high volume of available property, it's a buyer's market. So, not only can an investor get a piece of property at a really good price right now, one can lease it and expect top dollar for it.
There are still very nice affordable neighborhoods inside Houston's inner loop that are worth exploring. An effective strategy would be to purchase a few homes, invest for minor upgrades, lease for a few years and then sell when the economy picks up.
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