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REAL ESTATE Apartment Demand Article

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SteveO

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SteveO

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If you have read the article, there are a couple of interesting points.

I am of the opinion that the overbuilding of single family homes, both condos and houses, can have an affect on the rental market.

During this last housing boom, many renters went in the direction of home ownership. Developers went nuts building more housing units to sell. As some of the less-than-qualified homeowners drop from the ranks and become renters agian, there are still houses that are sitting empty. Some of these will inevitably end up in the rental pool, along with all the condo conversions that were touted to be saving the rental market a few years ago.

The saving grace for the rental market (which is the crux of this article) is the fact that there are less people as a percentage that are purchasing houses. Some of the areas that had overbuilt homes were seeing a slower recovery than anticipated.

I am banking that some of the areas with strong job growth and reduced development are going to see some strong rental gains in the next few years.
 

Yankees338

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So, basically, this article is saying that due to the lack of people buying houses, more houses will be put onto the rental pool, thus increasing supply. However, the fewer people buying homes also creates an increase in the amount of people interested in renting, thus increasing demand? So, if what I understand is correct, then this article is basically saying their shouldn't be much change in the rental market? SteveO is saying that there won't be much change except for areas with strong job growth and reduced development because the demand (caused by the strong job growth) will increase while the supply will stay the same or decrease (b/c of reduced development).

If all that I've posted above is correct, then I understand it! :hurray: Hopefully it'll help clarify this for those that didn't understand. If it's not correct, then someone please correct me because, once again, I'm wrong! :bgh:
 

SteveO

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The article was stating that there will be an increase in demand for apartments and then went on to name a couple of wildcards.

There is a lot of math that can be used to see what directions that a market is going. The trick is to get the right mix.

There is still growth in households from children leaving the parent's nest and migration. This should continue as long as the job formation continues. Strong job growth is usually tied together with population growth and new home formation. The issue was that all the excess building will be filled up to a degree before the apartment market will soar in certain areas.\

Some of my comments are not necessarily in the article. I just wanted to add some inputs.
 

SteveO

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Sorry Jesse, I didn't see your question.

I am not sure at this point. The search will begin once I feel Houston is showing strong gains.
 

yveskleinsky

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Steve O-

When you go apartment hunting, do you look for properties that are mismanaged and run down? And if you do, then how do you bank roll them until they get going? And then what do you do? What systems do you have in place to make sure they are properly managed? Any advice on how to manage (or not manage) a property?

Thanks for your time. :)
 

SteveO

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I don't mind a couple years of neglect but, I don't particularly care for full rehabs.

I like to see the lenders lend on value as opposed to purchase price and get some funding included for a reduced payment early on.

As far as management goes, I feel that managing yourself is a good learning process but will eventually bog you down. At some point you need to find a GOOD professional manager.
 

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andviv

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I like to see the lenders lend on value as opposed to purchase price and get some funding included for a reduced payment early on.

Steve, what do you mean by this? I understand you are going to look for a loan
based on the value of the property BUT you are buying it below that price, as you are buying at a discount.
I did not understand it when you say get some funding included for a reduced payment early on. Would you mind explaining this one?
 

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