ORLANDO, Fla. – Sept. 28, 2011 – An investor paid cash last month for a four-bedroom, three-bathroom house with a three-car garage in the Lee Vista area and immediately had a pool of potential renters competing to move in.
“I stuck a sign in the yard, put it on the MLS and had two dozen showings within three days,” said real estate agent B.J. Edens of Re/Max Town Centre, who handled the property. “Things are crazy out there … I’m expecting it to continue for a little while until we start to see the loan market loosen up.”
Today’s rental market has the hallmarks of the frenzied housing market circa 2006, when buyers were willing to ask, “Where do a I sign?” before they even walked through a property.
But this is no bubble.
This is the beginning of the correction of the market’s radical over-correction.
Ever since foreclosures started rising, so did the demand for rental properties.
Thousands of former homeowners who either ended up in foreclosure or shed their house in a short sale are frozen out of the buyers’ market until they rebuild their credit. Perfectly creditworthy people are choosing to rent because they don’t want to gamble on values taking another nosedive.
We’re raising a generation of renters who are scared to buy after watching their parents struggle through the housing bust. At the same time, housing prices and interest rates are at historic lows.
All of that adds up to one very important fact that points – finally – to a healthier housing market: Investors can get good enough deals on houses and command high enough rents that being a landlord is no longer a losing proposition.
People are starting to make money in the real estate business again. And that’s a step toward normal in an otherwise depressed market.
Scott Hampton owns a company that manages about 500 rental properties and launched a new division that charges would-be tenants a $350 flat fee just to help them find a home.
“The houses go so fast. We’re finding 70 percent of the people sign up for it,” said Hampton of Hampton & Hampton Leasing & Management Inc.
Hampton, who owns the property management company with his wife, said they have hired seven leasing agents who charge a fee to help tenants secure a property. People are willing to pay because they often have trouble even getting a returned phone call from landlords who are overwhelmed with multiple inquiries from potential tenants.
Another good sign for housing: as rental rates increase, more people who have good credit and can qualify for loans at today’s low interest rates will find it just makes more sense to buy. With rents hovering between 75 cents and $1.50 per square foot, a monthly mortgage payment could be cheaper than rent.
“That will definitely be a factor again,” said Maria Rampy Blanchard, general manager of Olde Town Brokers.
She said the number of rental referrals she receives has shot up and that the good properties get snapped up quickly, which allows some landlords to charge a premium.
“The inventory is low,” she said. “They rent out almost immediately, definitely within a 30-day period.”
And then there’s the newest buzzword in the business, and perhaps the biggest sign that good rental properties are in demand – “foreclosure disclosure.”
Some renters are so desperate for a good property at a reasonable rate that they are willing to sign a waiver acknowledging the house is in foreclosure, and they could be forced out before the end of their lease.
“We actually have forms for that now,” Hampton said.
Source: www.floridarealtors.org
Source: Copyright © 2011 The Orlando Sentinel, Orlando, Fla., Beth Kassab. Distributed by MCT Information Services
