The housing market’s new signs of recovery are accompanied by continued life in the rental homes investment market. Alert investors picked up on the earlier foreclosure epidemic – especially this year’s income stream-producing variety. ‘Buy low, sell high’ had largely become ‘buy low, rent high’ as rising rental rates met swooning residential prices. Although housing’s bottom appears to have been reached and newly reversed, Santa Barbara rental homes rates are still subject to the general uptick. In short, opportunities for investors remain.
We’ve talked about the topic earlier, but for those who missed it, here’s a thumbnail review:
The foreclosure market draws attention.
This summer, newspapers like the L.A. Times widely trumpeted the investment rush that was underway due to the raft of nationwide foreclosures. Data tracker CoreLogic predicted a market that could be “worth $100 billion in terms of rental investments” for 2012. The idea was to “get your hands on a great foreclosure deal” with the long term in mind. Many investors did take them up on it, usually realizing the intended results. For most investors who continue to keep tabs on Santa Barbara’s rental homes market, the most common strategy remains buying low, then making the repairs necessary to rent high.
Rental home rental rates climb.
Although you’d usually expect an inverse relationship between home prices and rental rates, the signs of an apparent turnaround in the Santa Barbara and Montecito homes market doesn’t seem to have had much of an impact on the rate of rental increases. If that holds, it means that buying rental homes in the SB area as an investment could continue to produce for the foreseeable future – depending, of course, on keeping them occupied by quality tenants. Which finally leads us to….
Increase in renters
As part of the fallout from the financial crisis and maddeningly slow recovery we are still experiencing, a continuing stream of those forced to default on their mortgage payments have joined the ranks of renters – many of them high quality tenants. That’s an added incentive to Santa Barbara rental homes investors, allowing them to feel more comfortable spending on the repairs often needed to turn foreclosures into a desirable rental homes.
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