This week, someone asked me: "Does rental demand go up or down during a housing crises/recession?" I thought this would be a great question to answer here:
Economic uncertainty among us is on the rise and as I have already seen, prompts people to delay their plans for homeownership. Renting becomes a temporary, pragmatic solution, allowing people to wait for economic conditions to stabilize before making a significant investment, like a home.
Why, you ask? Because homeownership can become extremely challenging, banks tighten their lending criteria, rates increase and job uncertainty rises. Which as a result, makes homeownership less attainable for many, people tend to gravitate towards renting as a more flexible and immediate housing solution than buying.
The reason I bring this up is because recently I have found sellers wanting to sell at a price that is not attainable for buyers in todays market, so the next best option is to keep the home and become a landlord! Fill the home with a tenant and charge rent to cover your mortgage, and ideally, make a little profit!
Historically, previous economic downturns or recessions have been associated with an increased demand for rental properties so being a landlord right now is not a bad thing in my eyes! This aligns perfectly with my theme of owning multifamily investment properties, even during a downturn, owning real estate could be your way out!
I promise you, this market is cyclical and while we shall make it through, it will continue to be a bit on the bumpy side for some more months but many are predicting that we might experience some interest rate stabilization by 2024, which is not so far away. (I mean, we are only eleven weekends away from Christmas!)
Stay educated, ask the professionals in your world their opinion and listen to your own timeline. Is now a time that aligns with your long term goals to start or continue your real estate portfolio? I believe whole heartedly that the best time to buy real estate is when YOU are ready. The market is constantly changing so if you are curious to start your real estate investing journey, learn the market or just discuss your thoughts, I am always available! 541.645.0920
