Going, Going, Gone! Single-Family Home Leases Are Flying Off the Market
View the original article by George Mora here on his Austin Real Estate Blog.
Now would be a great time to consider, or reconsider, investing in single-family homes as a “passive” income investment opportunity in your retirement strategy.
For the second time in a row, my same young clients have missed an opportunity to put an application on a lease house because another lease application was submitted first. Not only were we beaten to the punch, but the first submitted application actually looked acceptable. Both leases were for $1195 / mo, both houses were in great condition, and both went Pending approval status in days.
These are very nice homes that did not get the offers they wanted when they were on the market for sale. So, rather than take a loss in this challenging market when there is so much inventory out there, the owners decided to lease. This has been happening all year. And, with the mortgage qualifying criteria not getting any easier, I expect this trend to continue for years to come. Good houses at strong market rent rates will lease quickly. Good, qualified prospective home owners will continue to lease a house first while they save for a house and improve their credit standing.
Although mortgage loan rates are at historic lows hovering under 4.5%, qualifying for a loan continues to be a challenge for prospective borrowers on the bubble. So, think about all those home buyers who qualified for a loan back in the hey-day of “no document” loans, and interest-only ARM loans. (Interest-only homes allowed borrowers to qualify because it raised their income ratio against the mortgage debt.) The difference between those who qualified then and those who qualify now is their desire to continue living in a house, not an apartment.
The dark pink/bottom line of the graph is the number of days on market of homes leased in 2010. This shows that houses for lease this year from April through August leased faster than in any of the same months since 2006. September and October were not bad either with only 2007 showing shorter days on market.
If you are an investor you can appreciate that having a house on the market for less than a month will save you significant amounts of money and stress.
I am continuing to analyze the lease market for these four cities and breaking down the top rentable areas by subdivisions. I am looking for the best neighborhoods where investors can get the best cash flow for the newest houses and least amount of time on the market. Because of the shift in the sales market, I am finding some shifts to areas where the number of houses that have lease have increased significantly over the past two years, in some cases nearly doubling. These are subdivisions where families have always flocked to for schools and community.
This article is provided by George Mora of Realty Austin. George works in Austin, Texas, as an Austin real estate agent with expertise in buying and selling Austin homes. Contact George by filling out his Reatly Austin agent contact form on his agent profile, or find homes in Austin on RealtyAustin.com.