Do you believe rent can keep up?

[Ryan Daniels]

Hi All,

I'm new to BP and the Real Estate world in general. My question is impossible to answer, and I know that. BUT- nonetheless, I am interested to hear others' opinions on it. With the price of real estate absolutely booming, how many of you are continuing to buy properties? Looking at some of the markets that I am familiar with (meaning places I have lived in the past 10 years - and there are several), home prices seem to be significantly higher, even when looking back only 3-4 years, well after the housing bubble recovery. 

I know that RE tends to increase in value over time. I have no problem with that. And were I an appreciation investor, I'd be happy to get in right now, and sell a few years down the line. My question though, is about rental income, and renters in general... Do we believe that those who aren't in positions to buy RE (renters) are going to be able to pay the increased rents that are required to make these high purchase price properties cash flow? If so, why? With prices of goods and services increasing, but wages stagnating, or worse, the unemployed staying home receiving COVID benefits, why do we expect these people to be able to pay increasing rents? 

I would love to hear your thoughts and opinions. Again, I know none of us have a crystal ball, and in a sense your guess is as good as mine.