We all know interest rates are low, right? If you aren’t a buyer, why is this important to you? Because maybe you should be a buyer.
Right now, if you pay rent, chances are most any loan you can acquire to purchase a similar space to the one you rent could very well be as much or cheaper than your present rent. So should you just continue to rent and not bother with homeownership? Could be, but my vote is no. Furthermore I’ll argue rents are on the brink of increasing. But why would rents be on the rise? I’m glad you asked.
Simple: supply and demand. Fewer people qualify for loans nowadays and fewer buyers means more renters which means more demand which means less supply which means what? Higher rent. I don’t care where you live or what market you’re in, this formula will hold true. So, brace for higher rent or invest?
A single family home is a liability; a multi-family home is an asset. People will always need a place to live. If you lose your job tomorrow and you own your own home would you rather be on the hook to your lender alone or gather rent from a tenant and ease the burden?
Don’t get me wrong. Landlording is not for everyone and is truly wearing another hat. But I think the writing is on the wall. The more sought after rentals go fast now. Faster than I can remember. Some of my own personal rentals I’ve leased in the past 6 months I’ve leased to the first person that’s enquired. Coincidence or am I undervaluing my own property?
I love my tenants. Love them. I couldn’t do what I do without them. Will I be raising my rents in the next little while knowing full well some or possibly all of them may read this? Quite possibly. Do I want to raise the rent on any one party or dwelling? Of course not. I want what the market will bear (bare, you pick). I have a family to feed and future to consider and undervaluing any of my assets certainly is not a way to achieve financial stability. I think my tenants would appreciate that. I’d even encourage any and all of them to consider investing in multis now too – whether I represent them or not.
So you be the judge. If you’re on the hunt for an apartment, how’s the search going? Finding what you’re looking for or a little frustrated? Perhaps rather than seeking out a space you can call home on a temp basis with the possibility of paying more rent in a year or two (or less!), the time may be right to embrace the responsibility of being a homeowner and possibly a landlord. Rates will climb again, but when?
