Dick Milde/Lentinman OT Rents may go down some and yes, supply may keep increasing relative to the demand, as banks reduce their inventories and more vacant homes change hands to home owners, but rents are still better now than 06 or 07 and tenants are lining up. Here in Michigan I’m cherry picking distressed properties in Detroit suburbs at 30 cents on the SEV x 2 or the figure the state values your home at based on their 3 year comp avg. Current renters will pay off my new purchased homes in 5 years and give me a cash on cash return of 1200% in 5 years after I sell the home.
If I cherry pick REO real estate at 30 cents on the highs of 2 years ago with 10% down and home averages have decreased a total of 33% from the highs, my 5k to down pay and reddy up a 29k purchase will net 60k as I sell a tenant paid off home for 65k in 5 years. This assumes I have 2 months vacancy with maintenance out of pocket. This would be a home I purchased for 29k that previously sold for 100k 18 mths ago. Why do I care if rents go down 10%? My numbers change to the downside only a small amount. What stinks is the home I live in or any real estate I had earlier has worked against me recently and probably will, as you say, for awhile.
