Investors are Shut Out of the Condo / Townhome Market
A Market Of Ready, Willing & Able Renters
The size of the rental market has been increasing recently and will continue to do so. With a greater number of people who have lost their homes to foreclosure or short sales, more people need to rent and are looking to rent something comfortable for their family, rather than an apartment.
This rising need for rental properties is why more investors are moving into the market now. With a record number of properties priced so low and a big question mark surrounding how much longer those list prices will stay low; many investors are moving into the market while they can create positive cash flow and comfortably wait for the market to return.
In Forsyth County, nearly half of all single family home sales in the first quarter of 2011 were under $200k and nearly one third were under $150k. For condos / townhomes, nearly half were sold for less than $150k. In North Fulton, over half of all condos and townhomes sold for under $150k.
Now Is The Time
These represent great opportunities for investors who can fill the rising need of a rental market. However, many investors don’t know that condo and townhome communities typically have a cap on the number of units within a community that can be rented. Usually it’s around 20% – 30% of the total number of units. Most owners are unwilling or unable to take a loss on a sale and have rented their units – a great solution for those people who need to move but can’t sell. And with a number investor owned units already in place, new investors are shut out of condos and townhomes.
The alternative is single family homes in North Forsyth. Right now, as of this post, there are over 100 properties in Forsyth County listed for $100k or less. Some of these may require a lot of work, some are mobile homes as well. But a great many are small, 2 and 3 bedroom homes that will rent for $700 – $1000 / month easily.
Investor Beware
So, for new investors testing the water, make sure you know what you’re buying and if it will meet your needs before you go under contract. Understand the rental market in your area and you can still achieve good cash flow.
