Apartment Vacancy Rate Set to Break Record

Oct 9, 2009 | No Comments | Sean Mills

I was just reading a website the other day which was forwarded to me for a firm specializing in syndication of investment properties and the website had predictions made back in 2008.  It stated, and I quote,
Reason #3
Smart investors will own cash-flowing rentals in 2008. Just as property prices soared over past 5 years, RENTS [...]

I was just reading a website the other day which was forwarded to me for a firm specializing in syndication of investment properties and the website had predictions made back in 2008.  It stated, and I quote,

Reason #3
Smart investors will own cash-flowing rentals in 2008. Just as property prices soared over past 5 years, RENTS will be increasing over the next few years! In fact, on a recent Training Call, Mike explained that he expects rents to double or triple within the next 3-5 years! Now is the time to own income-producing properties. Due to the lack of affordable entry-level housing and other factors, home ownership is difficult for many at this time. This is putting a lot of renters back into prescription drugs without the market. With low purchase prices, and rising rents, cash flow has never been better. In fact, Mike Watson is currently finding sellers that are cash flowing even while charging below-market rents.

Take a look at the attached article and let me know if the syndicator was informed or just selling, you decide.-Sean

Even as the U.S. home ownership rate dips to a six-year low, landlords are having an increasingly difficult time finding tenants. The national apartment vacancy rate hit 7.8 percent in the third quarter, its highest level since 1986, according to a new report from real estate research firm Reis. Moreover, since vacancy rates increased even during this traditionally strong period, landlords should expect rental demand to erode even further from here, says Victor Calanog, a Reis research director. “If things were weak this time around, you can expect that during the colder months, things will be even weaker,” Calanog says. “We started monitoring this around 1980—we are going to break all-time highs.” Here are five things you need to know about the development:

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Go Ahead, Walk Away, There is nothing immoral about ditching your mortgage

Oct 9, 2009 | No Comments | Sean Mills

The “me, me, me” mentality is alive and kicking in the good ole US of A.  At the IMN Distressed Residential Real Estate Symposium last month one prominent lender stated his business is doing just fine due to short refis where owners are refi-ing the existent debt short or threatening to walk away from their [...]

The “me, me, me” mentality is alive and kicking in the good ole US of A.  At the IMN Distressed Residential Real Estate Symposium last month one prominent lender stated his business is doing just fine due to short refis where owners are refi-ing the existent debt short or threatening to walk away from their non-recourse loans.  I ask you how is that any different than these debtors?-Sean

A solid two years into the housing bust, the national foreclosure wave doesn’t show the least signs of abating. Banks that had called a foreclosure moratorium are now back to the business of taking back properties, and the foreclosure numbers are again at record highs. As the foreclosures rise, so too does the criticism of “walkaways” who hand the keys to their drastically devalued houses back to the bank.

Last month a study from the credit reporting agency Experian and consulting outfit Oliver Wyman estimated that close to a fifth of troubled mortgages involved borrowers who were “strategically” defaulting—walking away from mortgages they could pay but decided not to because they owed more than their houses were worth. Self-assigned guardians of financial ethics see the willingness of borrowers to abandon their mortgage debts as a sign of the “erosion of social and moral standards.” The aim of these critics is to shame debtors into sticking with their mortgages. That’s something debtors should take with a grain of salt. There are many good reasons to keep paying your mortgage and avoid the black mark of foreclosure, but the immorality of sticking the bank with a loss isn’t one of them.

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