National Apartment Survey: Rental Property The Better Investment

A Recent Survey
National Real Estate Investor and Marcus & Millichap

55% of all respondents to the survey believe that now is the time to buy apartments. Owners are beginning to see improvements in vacancy rates and rent rates are rising. We are coming off a low low bottom, but there is improvement. The study shows that 41% (31% in 2009) of owners responding to the survey think rent rates will improve over the next year and 70% feel that this is the time to buy.

Financing
Looking up

34% believe that institutional lenders are increasing their lending volume, 28% see an improvement in Commercial bank lenders and 19% in FHA. I wrote  piece on how the FHA funding of single family homes has skewed the market. I think when reform comes to the FHA, the money allotted to rentals will be significantly higher than it has been. SEE LINK

Mixed Use Space
Risky bet

Rental property with commercial or storefront space remain risky. A two unit building with a store down is a liability in a recession. And in this one, with consumers paying down credit cards, we are seeing a spike in empty retail space. I would undervalue the benefits of storefront retail space until we see a pick up in job growth. Vacancy rates in retail spaces rose 10% in 2010, according to the survey

Rental Property   
A Better bet

Morgan Stanley analysts expect housing prices to continue to slide, reaching new depths in 2012.Morgan Stanley expects 2011 home prices to fall 5% to 10% from this year with four years of flat prices after that, although the risk of slight additional downside in prices and extension of the trough to 2012, has increased. Via Housingwire

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