Market, Opinion

Is now a good time to be a landlord?

 

Last month, the delinquency rate for mortgages was at an all-time high, with one out of eight homeowners either late or in foreclosure. Across the country, home values have dropped on average anywhere between 8 and 30 percent. And in Atlanta, prices have fallen 12.1 percent, according to the S&P/Case-Shiller home price index.

For some, that paints a pretty bleak picture of the housing market. But for others, it looks like a time of great opportunity.

Why? Because, compared to their recent values, houses are cheap, and investors looking to hold rental properties for the long term are finding better and better deals.

For example, lenders have really started unloading their foreclosure properties at discount prices, which is a good sign for those looking at the long-term hold. Almost half of all deals today are either REO or short sales, and it is real estate investors who are increasingly taking advantage of that market.

In fact, our investor clients are telling us that they’ve never seen more foreclosure homes in better condition than now. Good properties are available, and at good prices.

Still, when looking at buying rental property, real estate investors should bear in mind:

  • A thorough inspection is absolutely mandatory. As anyone who as read an REO addendum to a sales contract can tell you, the selling lender makes no representation as to the condition of the property at all. As-is is the rule, and with a limited time to walk away without forfeiting your earnest money, you need to be certain the property doesn’t bring with it hidden repair costs which may affect your ultimate cashflow.
  • Bottom-fishing is OK. Right now, the banks are swamped with REO properties, and there’s nothing wrong with submitting low-ball offer after low-ball offer until someone bites. While there isn’t an average percent discount that lenders will accept, it still can’t hurt to make the offer.
  • It is still important to know your market and evaluate your specific deal. If the area ultimately won’t support the rental rate you need, then you’re probably offering too much.

Many personal finance experts have long-believed that real estate is a key component in building long-term wealth, and owning rental property is a fantastic way to earn that wealth slowly over time. With opportunities unseen for years, more and more investors are turning to rental property as a primary focus of an overall successful investment strategy.

 

Harlan and Associates has years of experience in helping real estate investors be successful, and ee’d love to be your Georgia closing attorneys. Want to know more? Just contact us today and we’ll be happy to discuss how Harlan and Associates can be of service
to you!

For Rent, originally uploaded by angi bbyx3.

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