Whether you’re an investment property owner or prospective duplex buyer, when you read or hear RealtyTrac Vice President Rick Sharga [youtube]http://www.youtube.com/watch?v=SLFLc-SAM24[/youtube] share their monthly foreclosure statistics, you should mentally respond with the following thought…
“And all of those people will need to rent.”
For example, while the headline on this week’s report was “Foreclosure Activity Falls to 44-Month Low in July”, the rest of the story went on to state that while lenders already have 850,000 homes on their books nationally, there are another 1.1 million property owners in earlier states of foreclosure…and all of those people will need to rent.
There may also be as many as three million more properties that will be foreclosed upon before the housing market improves…and all of those people will need to rent.
Remember the pay option mortgages? The ones where you could pay interest only, interest plus principal, and so forth? Well, $200 billion of those mortgages are due to start resetting this year. It will be difficult for those homeowners to refinance, because the mortgages are on properties that have lost a great deal of value.
And if those folks face foreclosure?
All of those people will need to rent.
The greater the demand for places to live, the higher rents go.
Has there ever been a better time to invest in duplexes?
Probably not in our lifetimes.