In the last few years we have had to watch as good, hardworking people lost their homes. This happened for many reasons. Two of the most difficult to see were when homes owners became unable to pay their mortgages because of an unexpected illness that incapacitated them such that they were unable to work, or due to the intense recession, they lost their job as one business after another closed its doors.
Of course there were other people who couldn’t pay their mortgages because they had over extended themselves in anticipation of continuing to build equity in their homes. When this didn’t happen, the problems began.
Whatever the underlying cause, many people have lost their homes to Short Sales or Foreclosures, but this isn’t the end of the story. Those families still have to live somewhere, hence the burgeoning rental market.
The other factors in this opening opportunity are of course the depressed values of Real Estate and the low interest rates for mortgages. Even though most investments require at least 25% as a down payment, the long term return on the investment can be far above that of any other investment product right now.
It is this sudden influx of tenants into the Real Estate marketplace, along with reduced property values and low interest mortgage rates, that has made Investors sit up and take notice.
Working with tenants can be difficult because a landlord, rightly so, wants to protect himself from loss and consequently wants the most reliable tenant that he can find, but keep in mind that although the credit of many would be tenants, shows a Short Sale or a Foreclosure, in many cases it wasn’t that person’s fault. They would have continued to work and to pay, but they no longer had a job. They are not bad people. As a REALTOR® it is our task to find the underlying cause of the problem while assisting the tenant in putting himself back on the right track, where we can ultimately match him with an understanding landlord.
In Central New Jersey, which is our primary marketplace, more and more investors are contacting us with the wish to purchase rental properties. We are seeing the small investor wanting to purchase a condo and place one tenant in it, but we are also seeing many investors who want to purchase multi unit properties, even if they have to put money into the buildings to restore them before they can rent them, they still see a huge potential for income.
As with all opportunities, it will not last forever, but while it does, many investors both large and small, will be able to put their money to good use in providing a home for a family in need and at the same time making a good profit for themselves. It is a win/win situation.