Where Rents Are Rising The Most
If you are wholesaling real estate, it pays to know where rents are rising the most, versus where they are crashing.
Some real estate investors and home buyers in general are having a harder time finding properties to buy with the white hot housing market.
Fast rising, hyper competitive markets like this can be great for real estate wholesalers. You can often buy at retail prices and sell for more the same day. The danger with that is getting caught holding a lot of overpriced dead weight as the market turns. That can bankrupt you.
Ensuring that you have a more sustainable business that won’t leave you hanging out to dry is smart. So, for those looking for better deals with quick exits, where do you look?
Where Landlords Are Buying
Retail buyers can be fickle, and by the time the data comes out revealing they have left the party it is usually too late to correct your buying strategy.
While selling to retail home buyers can provide premiums, selling to flippers and landlords can be a higher volume and more consistent business and income stream.
Right now landlords can afford to pay more than ever as they are rich with cash capital and technology is helping them to operate more efficiently and profitably - creating better yields on pricier deals. Investors tend to keep on justifying buying at higher prices after retail buyers are priced out of the market.
It’s also worth noting that landlords are storming into the single family market more than ever. They are even buying out whole new home communities. According to Globe St. the SFR market is now worth $3.4T, just behind MF at $3.5T, but the gap is closing.
Follow The Rents
Landlords are chasing rents, cash flow and yield. So, rent performance can be a great indicator of where landlords are going to be looking for deals, and where your deals will be easier to market.
According to Seeking Alpha the average US monthly rent rose about 4% over the past year.
However, there is great disparity between markets that are crashing versus rising. Rents are now down almost 9% in San Fran and NYC. Declining rental rates can also be found in Seattle, Boston, DC, Chicago, and Minneapolis.
Among the fastest growing markets for rental rate increases are Memphis, Tampa, and Phoenix. Riverside, CA has seen rents up by almost 12% as people flee expensive dense urban areas like LA and the Bay Area.
You may also choose to check out many of the more modestly growing markets that may not have peaked yet, and offer the most room for growth and sustainable growth ahead.
You can wholesale your deals raw as-is, provide units already occupied with tenants, or offer turnkey deals.
