Thursday, August 8, 2013

Is it time to rethink being a small rental property owner?

By: Payam Raouf
Designated Broker
Arizona Property Management and Investments
(888) 777 6664 ext 114
THE WINNER OF 2011 and 2012 " BEST IN PROPERTY MANAGEMENT" IN PHOENIX. USCA


Institutional investor owned rental properties are flooding the market. Equity Funds backed by US tax payers money have bought too many single family homes in Phoenix Metro and  it is getting harder to get the kind of return mom n pop investors were getting a few years ago forcing them to sell and lose their retirement supplemental income.

Up to just a couple years ago, rent was almost equal to one percent of the purchase price on homes under $200,000. After all owner's costs, he/she would have cleared six to seven percent annually on their investment. Now a days try one or two if they are lucky.

I have read that these equity funds are losing their shirts on these purchases gambling big on the future appreciation. Some have pulled out reducing their exposure,  some are still sitting at the table playing with someone else's  money. 

Smaller investors can not compete with these large equity funds to keep up with the losses waiting for long term  gains, if this  is a part of their income they depend on to pay their bills with.

Is it time to rethink being a small rental property owner in Phoenix? Should you take some money off the table now and put it back into your pocket or keep playing against the casino.?

Are you a day trader and watching every move the market makes 24/7 or have any idea what you can get for your house these days? We have come off the peaks a bit. The MLS data shows less sales and a lot more price  reductions comparing to a month ago.

the question is what to do with the money if you sell. Right? The right question to ask is, what could I have done with the extra money I would have got selling now as oppose to a few months later as interest rate goes up bringing the prices down and That is just one factor affecting the prices. What if everyone wakes up one morning and says, lets sell ours too. We are not too far away from that day either .

Think about it. 

Call me directly for all your property management needs in Phoenix metro and a free home valuation . 623.776.5774 

Thank you,

Payam Raouf