Will Landlords become the New Investor Class?

There’s always a way to make money in real estate, even if the economy is down. Most of the value of any nation is tied up on the land which it occupies and most of the wealth of the world reduces to land at some point. The price for land and homes will inevitably go up and down. During the real estate bubble, the new investor class were the property developers who bought up real estate and put up new housing at a truly spectacular rate. As their fortunes floundered, those properties often went into distress.

The fact remains that many Americans are currently leery about taking on the responsibility of a mortgage. The news is full of horror stories, the labor market is tight and people are wondering if it’s even worth it to put themselves through the process of securing a large source of funding for a home. Moreover, there are a great many people who have destroyed credit as a result of the economic downturn and can no longer qualify for mortgage lending, even if they were inclined to do so. Construction is at a low, though it has picked up in recent months and the streets are lined with properties bearing “foreclosed” signs. What’s an investor to do?

There are investors with money to put to work but who are hesitant to get into any market that has anything to do with real estate. At the same time, there are tremendous opportunities presented by these market fluctuations. Those former homeowners and those who have opted to not buy do need a place to live and, more often than not, they’ll be looking for rentals. For those of sufficient means, investing in rental properties has potential to become a hot market.

Usually, rental markets are associated with young people and people who live a transient lifestyle. Florida’s real estate market is exhibiting signs of how this is changing. Upscale areas such as Miami Beach, Sunny Isles Beach and South Beach are becoming popular with investors seeking to buy rental property with waterfront views. This also betrays that the renters to whom they’re marketing are certainly not college students looking for the lowest-possible rent. If the economy shifts over to a primarily rental-based one, these investors stand to make a healthy profit for having had the foresight to purchase these properties at slow market prices.