Over the past few months, we've seen the inventory of homes available on the market shrink considerably. Year to date in the Traverse Area Association of Realtors, the number of residential transactions closed were up by over 22% through September. Meanwhile, the number of homes listed (brought on the market) was DOWN by nearly 6%.
The result is rapidly shrinking inventory, upward pressure on prices, and the best demand that we've seen in years.
The same pressure is being seen in the rental market, with renters having difficulty finding suitable options, and upward pressure on rents. Even if market or cultural conditions lead to a decrease in the overall home ownership rate, people still need places to live, so many savvy investors are looking at residential real estate once again.
The decision to become a landlord is not one to be taken lightly. These are assets that need to be carefully managed, budgeted for and monitored. However, owning real estate has historically proven to be one of the greatest builders of wealth, with tenants offsetting or ideally covering the landlord's debt service and cost of ownership. There is also the possibility tax benefits as well- though your accountant or tax professional should be the definitive source on that topic.
With the market turning, and some already predicting that people will in a few short years be saying "I wish I'd bought real estate in 2012", the question is raised: "Should I invest in real estate?"
Your Realtor should be a trusted source for local information on values and a partner in finding potential rental properties, but by all means, equip yourself with information as well. The National Association of REALTORS(R) has produced this Field Guide to Investing in Real Estate, with lots and lots (really, LOTS) of links to helpful articles on the subject.
Ready to start building your portfolio? Contact your Coldwell Banker Schmidt Realtors agent today, or drill down to your favorite neighborhood using our interactive map search (everybody's listings are there, not just ours!) to get a sense for what's available.