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Let’s mix things up a bit today, shall we?
Today’s Market News Update comes from “The Cash Flow Mercenary” himself – Dennis Fassett.
Dennis is one of our esteemed faculty members here at Real Estate Mogul, and you may recall from his recent Mogul Live training call – ”How to Buy Your First Apartment Building” – that Dennis specializes in single-family and multi-family cash flow properties.
Based on recent news about noteworthy trends in home ownership and rental rates, Dennis agreed to write an editorial piece today, in order to explain how these developments (in his area of expertise) will affect cash flow investors like you …
Landlords Score Twice!
~By Dennis Fassett
Cheers!
It’s time to celebrate! We just received some INCREDIBLE news this week.
And not just one, but two major stories, coming out of two news organizations.
The first story was in Bloomberg, and the title screamed “American Dream Slipping as Homeownership at 18-Year Low”
I won’t bore you with a lot of the meaningless blah blah blah that bogged down most the piece, but I will tell you that the icing on the cake in the article was that first time buyers were the group hardest hit.
Yay! Score one for landlords!
Why is this great news?
Because we’re “buy and hold” investors.
And as the rate of home ownership decreases, guess what?
Our occupancy INCREASES. And more cash stays in our pockets.
And that’s exactly what we’re seeing right now.
ESPECIALLY with the types of houses first time home buyers occupy.
I can honestly say that I haven’t seen renter prospect activity at this level of near-frenzy in all my years owning rental properties.
The second article was from the Zerohedge blog, and their article was similar to Bloomberg’s, with one important difference.
It read “US Rents Hit Record Highs As Homeownership Plunges To 18 Year Lows”
Yippy skippy!! Score TWO for landlords!
Not only is renter demand crazy right now, but rents are increasing faster than I can keep up with them.
For example, one tenant of mine will be moving mid-month.
What I normally do this far out from them actually vacating is list the home for one week at some ridiculously high rent to try and snare someone that will pay the price.
Well it backfired on me this time. Huge.
I had the home rented at $995. (which was market when they moved in) I re-listed it for $1100.
And (so far) I’ve received 17 calls, and two people have already offered to give me a security deposit based solely on the pictures and video and without even having seen the inside.
See all the work this created for myself? I now have to sift through 17 damn applications, when in the past I would have been lucky to get one or two people interested at the much higher rent.
It’s a pain sometime owning rental properties. It really is.
It’s a tough job, but someone has to cash all those checks.
And who ever said that landlords don’t score? ;-)
And it’s not too late to join the party either …
Dennis Fassett
earned a BS in Economics and followed that up with an MBA in finance. After working and corporate finance and banking for several years, he started buying single family houses, and quickly built a very nice portfolio of cash flowing rentals. When the credit markets started to dry up and he couldn’t get any additional single family mortgages he shifted his focus to apartment buildings. He now has over $3 million in rental real estate. He manages most of it his self and still has a day job. Dennis has even created his own Private Equity fund to buy apartment buildings.