Yes, It Is Still Cheaper to Rent Than To Buy...

Last week, Orange County was named as the 7th Priciest Metro Area in the nation. The survey, published by the National Low Income Housing Organization listed the average rent of $1,550 for a 2 Bed/2 Bath apartment home as being the 7th highest nationwide.
In light of our current economy, this news bodes well for apartment owners. While home values have plummeted, the decreased Real Estate values still have cash-strapped renters priced out of the market to buy. That said, with responsive and proactive management, landlords should be able to keep their residents happy.

Just as market values are driven by a property’s location, the demand for rentals in an area is also dependant on the property’s location. As the owners and managers of OC multi-family housing, we enjoy the benefit of providing housing that is very much in demand. What’s more, there is not a lot here and not many places to build more (apartments, that is).

While there is the idea that the renter can simply “move where its cheaper”, the likelihood is that the renter will stay put. After all, it is cheaper to rent than to buy, at least in Orange County.

To Stay Put, To Buy or To Sell? Those Are The Questions.

There is a reason that the rich get richer while the poor get poorer. A recent article published in the Wall Street Journal summarized a study of high-net-worth individuals and their investment strategies with regard to their Commercial Real Estate portfolios. The data revealed that 47% of high-net-worth investors are looking to add to their portfolios during the economic downturn. In comparison, 12% of those polled have decided to dispose of their Commercial Assets. The balance, well, they were uncertain.

Yes, the 41% piece to this puzzle that is missing is the undecided investor. Right now, most of America is inline with this uncertainty. With regard to Real Estate Investment and Asset Management, vacancy rates in the Office and Multi-family markets are up. Real Estate values have declined, as have the rental rates brought in by those assets. It is a good time to negotiate with your landlord, but an even better time to negotiate a purchase or sale with a distressed property owner.