The real estate market is being dominated by rentals! Investors are flocking from all over the World including Canada, Australia and China to scoop up the homes in the phoenix Arizona metro area. Foreclosures and short sales make it very affordable for those with extra cash lying around to purchase a property for $100,000 or less which would have sold for more than $200,000 during the housing boom.
According to an article recently published in the Arizona Republic, “the regions home ownership has fallen back to 1997 levels in some cities, including phoenix, 30 to 40 percent of all homes occupied are rentals” 1
Why the swing in the rental market? The republic article illustrates this by citing an example of a family with a $3,000 mortgage payment who could rent a comparable property in the same neighborhood for $2,000 per month. In the past, you scarcely heard about foreclosing on a home. Recently however the term “strategic default” has grown into our vocabulary.
So why would someone choose to invest in real estate now after all the bad that happened during the boom. For one, the rate of return can be high; many are obtaining 10% returns on their investments, far above what you may find in other investment avenues. Furthermore you can have more control over a home. You can lease it, manage it yourself, and choose your own property management company to manage it for you, live in it part time or sell it.
With all of these benefits it’s no wonder many are still investing in real estate.
1- Reagor, Catherine. “Metro Phoenix Rental Homes Dominate Housing Market.” Arizona Local News – Phoenix Arizona News – Phoenix Breaking News – Azcentral.com. The Arizona Republic, 18 May 2011. Web. 02 June 2011. <http://www.azcentral.com/arizonarepublic/news/articles/2011/05/18/20110518phoenix-rental-housing-market.html>.