I do not think it is that odd that rentals are becoming harder to find, many houses are still being forclosed by banks so the people who used to live there are forced to find a rental in most cases.
The fact that it is currently cheap to borrow money for a home is an incentive, but i fear it might draw in some buyers who might get in over their head.
on the flip side, if it is getting more difficult to find a rental, this might be the time to buy rental property...
Rental return still not enough
tokyogai
5/5/2011 5:34:59 PM
Even in the markets that seem to be hot, the overall investment value of a rental property still seems to be marginal. If you have to depend on appreciation to make money, you should look at other investments. Rentals will help the market from going into total freefall, but I do not think it is really enough to lift the market yet. Rents will have to come up or prices come down more before the investment makes sense.
Re : Rental Boom Might Support Real Estate
yalanand
5/6/2011 3:47:06 AM
"Sales would be even stronger if tight mortgage lending criteria returned to normal, safe standards."
@Noreen,
I am not quite sure what does "tight mortgage lending criteria returned to normal, safe standards". Does it mean relaxing the lending criteria ?
Re: Re : Rental Boom Might Support Real Estate
Noreen Seebacher
5/7/2011 9:47:52 PM
Yes, credit remains tight. While no one advocates returning to the give-anyone-who-wants-a-house-a-mortgage days, there are concerns the pendelum has swung too far in the other direction.
Re: Re : Rental Boom Might Support Real Estate
Tenacious
5/10/2011 8:42:42 AM
I'm starting to see some light at the end of the tunnel (or is that just the headlights of the oncoming train again?). Nonetheless, feeling there are some good signs: a tighter rental market, lower early-stage delinquency, and record low home building. These have to have a positive effect on market fundamentals.
It is always a good sign when investor sees the rental income is closing up to the property value. When everyone talks about China greatest real estate bubble, few people notice that the rents in many China cities are rising faster during the past decade, sometime more than 10 times.
With rising rents, the housing price gets a firm foundation. Bubble may be deflated from inside in emerging market.
Part of the lack of demand for credit remaining historically low I believe is linked to the overall consumer sentiment on the economy. While consumers can repay their existing obligations I don’t think they are eager to assume new obligations based on the economy. They don’t feel confident in their jobs, have lost value in their homes and are dealing with high fuel and food prices. Consumers are once bitten twice shy after the crash and it will take and economic change that makes consumer feel optimistic about their future to create the demand for credit.
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