FIX-AND-FLIP RIDING THE RENTAL WAVE
GRAPPLING WITH TODAY’S HOUSING MARKET ADDS A NEW TWIST TO REAL ESTATE INVESTING: FIX-AND-RENT
Y es, the fix-and-flip strategy is still very much alive, but low inventory and increased construction costs have many investors fighting for their profit margins. While fix-and- flip is the best bet if you’re looking to make money quickly, rental properties will serve to grow your wealth over time with a long-term cashflow — and now, more than ever, is the time to consider this strategy. During the past year, prospective home buyers have been faced with fast-rising prices and a diminishing number of options. While that is par for the course in today’s market, the cost of a mortgage has almost doubled from 6 months ago. Many would-be homeowners are unable to find affordable entry-level housing, ultimately backing them into the corner of renting single-family residences, condos, and townhomes… which means rental demand will only continue to increase.
Rents are expected to continue rising this year and are being driven up by three likely factors including:
1. Fast rising interest rates pricing home buyers out of the market 2. Low housing supply and increased home prices leading people to stay put and continue renting 3. Extremely low rental vacancies due to unrelenting demand as young adults continue to enter the crowded market With all of these factors at play, more renters continue to be strong-armed into staying in their rental longer than they originally planned, or into choosing to rent a home instead of buying. Behavioral shifts developed during the pandemic will also persist, with moving away from densely populated spaces one of the most significant changes. In driving people to suburban life, it means that housing inventory can’t keep up with the demand, and neither can new home building.
80 | think realty magazine :: september - october 2022
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