Wednesday, January 18, 2012

Is it Time to Invest in Rental Property?

Once statistic we follow closely here at is the ratio of Rental cost to home ownership cost. More than any other yardstick this tells buyers if there is a market out there to support the money they are spending to buy a house. In markets like Southern California's inland empire, homes can be bought and rented out at a positive cash flow right away. Or if you decide to sell after buying, you know that there are renters who can afford to trade renting for buying.

One fun resource is which compiles a rent / buy heat map allowing users to compare the rental markets to buying markets.

The Zillow recently chimed in with an article about what makes a good investment in real estate.

Where ever your market may be, it is a good idea to investigate rentals before you sell or buy. They often are the key to the current prices.

Tuesday, January 3, 2012

Big Money Backs Housing

Are the big funds betting that housing is coming back in 2012? Recently firms including Caxton Associates LP, SAC Capital Advisers LP, Avenue Capital and Blackstone Group LP have been buying up housing related assets and even Goldman Sachs has turned around their opinion of the 2012 housing prospects as reported recently in the Wall Street Journal.

This interest comes on the heals of a NAR (the National Association of Realtors) report in December that said sales of previously occupied homes in the U.S. rose 4% in November from October, topping expectations. And inventory of previously owned homes listed for sale fell 5.8% to 2.58 million, the lowest level since May 2005.

If the market have not turned around many experts agree that they near the bottom: "The housing-price bottom is probably in sight," Goldman said in a December 15 report. Housing prices might decline by 3% next year before beginning a rise, Goldman says. The bank predicts gains of 30% over the following 10 years, not taking inflation into account."

For long term buyers this may be finally time to act.