Despite ongoing turbulent economic times, now might be the perfect time to invest in rental properties.
“You can really get some good deals,” Michael Rogers, owner of Cleveland-based Chandler Properties, said.
His full-time job is in Chattanooga at BlueCross BlueShield of Tennessee, but on the weekends he operates rental properties that include a duplex, a triplex, a self-storage facility and a warehouse in nearby Bradley County.
He’s been doing it since 2001 and said conditions are as favorable as ever in the rental business.
“Right now, everybody is scared of real estate,” he said.
But, in business, sometimes the best time to make an investment is when many others are sitting it out.
According to CNN Money, nationwide, more than 4 million people who used to own homes are now renters.
Some people are also reluctant to buy in this economy, fearing job loss or another housing market crisis, according to CNN Money.
Demand for rentals is up and that has landlords charging more, according to CNN Money.
According to real estate research firm Hotpads.com, rents nationwide jumped 11.6 percent in 2010 to $1,320 a month.
“I’ve seen, in the last year or so, rents have gone up,” Rogers said. “Here and nationally, in the recession, when people started getting houses foreclosed, there was light demand. Lately, I’ve seen it pick up.”
Laura Lambert, leasing manager for Wise Properties in Chattanooga, said that her market, which is in the North Shore area, seems strong.
Wise manages seven apartment communities, some that are strictly residential and some with commercial space, Lambert said.
Wise property currently includes almost 400 apartments and about 30 commercial spaces, she said.
The management company is also building two new mixed-use buildings-one on Cherokee Boulevard and one on North Market Street-that leaders hope to open in 2012.
Rent for Wise properties range between $710 to $1,350, depending on location, amenities and views, Lambert said.
“We see more and more people renting that may not have pictured themselves ‘back in an apartment again,'” Lambert said. “These, however, have been the residents who have stayed with us, enjoying the perks of an on-site maintenance staff and scheduled community events.”
Rogers has seen a shift in attitude about renting, as well. For a while, the attitude was that anyone who wasn’t buying a house was “an idiot,” Rogers said.
But that is changing.
“Now, they don’t mind renting,” he said. “That’s going to drive rent up.”
Lambert said it is a good time to get into the rental business in Chattanooga, if a person is willing to work hard.
“This person must also be willing to put in the work to make their property competitive in quality and price,” she said. “There are significantly more options for rentals than there were even two years ago, so a newcomer needs an edge.”