So here's my story.
I recently purchased a 3 bedroom house (at about 10% below market value at the time) in the hopes of renting it out, holding on to it for a year or two, and flipping it. I renovated the house, cleaned everything up, and bascally put in an ad that rents it out at my cost (before renos). So far I've had lots of people look at it, but no one actually go ahead with it.
As it sits, I can turn around and sell it right now, and make about a 20-30% profit on my initial investment. That being said, guess what I'm going to do????
It's just one more house off the market, compounding the crunch.
My point being is that IMO rental rates are still below actual market value (for the exact reasons Photon just mentioned). So until either the housing market levels off, or people start making more money to pay the escalating rates, it will mak more snse for guys like me to buy and flip. If you can't afford to buy, how are you going to afford to pay up to $2k in rent?
|