Unless you have been living in a lead cave OR have not been seeing or reading anything that I have been doing over the last few months you have heard me talking about the coming Apartment Boom… Frankly the apartment boom is starting right now.
One of the things that I can tell already is the demand for apartments. I am looking over the reports for this month as I type this newsletter and I am seeing our occupancy climbing substantially. Not only that but I am also seeing our rents going up as well. By the way, this is a profitable formula.
When you come around to this kind of success in the apartment property world it is not unlike the most basic economic model. Supply and demand.
There is a growing demand and not enough in terms of supply. That is the way it is here in the Heartland of America anyway. I have already told my top clients in their own newsletter that this will be a very, very good year. 2008 will be profitable for many of them.
My Question to you is what are you doing about this? Where are you putting your investment? Specifically, I would be thinking IRA kinds of investment here too AND NOT just relegating this to ‘regular’ investing.
Case in point. One of my clients from Texas recently purchased a 6 unit apartment property with me. This property is located next to the business shopping mall in this part of the state. Also, it is right next door to movies, grocery, shopping, etc.
Now, let me ask you…How tough will it be renting this property? How tough do you think it will be the hot and lathered up bandwagon but our friends the big dumb real estate companies will to!
The big dumb companies will come in and pay more for the properties because in most cases they require less of a return and there is pressure on them to get money into the market. Again, this is experience talking…It really comes down to simple American capitalism.
Buy low now, tend the properties so they will produce more cash flow in the next 3—4 years and then sell the properties to the folks that are all lathered up. Sounds a bit over simplistic I know, but, this is how the process will work. The interesting part of all of this is profiting off of other peoples problems.
Whether you like it or not a lot of money is made when one person’s problem becomes another person’s opportunity. That is exactly what is going on here. People need a roof over their head and many of them will not want NOR be able to buy a home in the coming years. This is a problem obviously for the mortgage and real estate industry in general. BUT, for us investors this is opportunity.