Another momentous real estate cycle is about to begin. And just in time for the New Year.
Rents are going up. Hallelujah.
Around the turn of the [tag-ice landlords ]century[/tag-ice] landlords in my town were being forced to give incentives such as a free month's rent or several free months rent. It wasn't too bad, but it was no picnic either.
Tenants then were fussier, more difficult to please. And why not? The market was in their [tag-tec tenants ]favor[/tag-tec].
How did it all come about?
Overbuilding, primarily.
Now the tables have turned. It's a landlord's market. Tenants are going to have to play this game our way. Results? They'll be humbler, more contrite.
The biggest difference is what they will be paying. Experts' estimates are between 3 percent and 5 percent more. That translates to around $22 to $36 more per month. Which can make a huge difference in the bottom line.
It's another reason why real estate investors ought to get out there and invest in 2007. As construction wanes rentals always come out the winners.
We think the building boom is really subsiding. I won't say building is over, because there will always be building, but the boom we've seen over the last few years is history. Construction costs are rising. And yes, I think we do have inflation even though some would like us to believe otherwise.
Which makes our real estate investments even more valuable. We're buying in at cheaper dollars. Our properties will appreciate. You don't have to go to Harvard to figure that out.
(How do you survive a bad rental cycle? My Dad gives his knowledge from 50 years as an investor in his new updated version of Create and Manage a Real Estate Empire in Your Spare Time . We will be offering his comphrensive course on this site soon).
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