Rental Prices During Downturns

[Cristian Ramos]

I’ve been investing in Alabama for almost a year now (buy and hold) and it’s been an interesting experience. All of my rentals are in the Montgomery area.

I was lucky enough to start investing before RE prices started rising. Not surprising, it’s getting harder to find deals that meet my criteria. The best deals today are those that involve some creativity/value add to justify the purchase price. I’ve also seen rental prices start to rise too - this is probably being fueled in part by the influx of investors (higher rents to justify higher purchase price).

I understand that single family home values are tied to comps and not cash flow. However, if we do hit a downturn (odd saying that given we are in the midst of economic recovery), should rental prices also decline as single family home prices did back in 2008-09? 

I’m interest mostly in the Montgomery perspective, but think it would be helpful to let other folks from other cities with AL chime in as well.