With recent articles and news that the housing market is beginning to recover and seeing sales increase investors have begun to re-enter the market. Depending on which type of investor someone is will dictate the pricepoint at which the investor bids. One investor; however, has a distinct advantage over the other in the current market.
Many Wall Street funds have begun to purchase homes for rental. With the rental market in many areas short on inventory rental rates have been increasing. This, in turn, results in this investor being able to offer a higher price for the home. From one end of the spectrum this is driving up home prices; however, on another end it is making it difficult for the other type of investor to find homes to purchase.
Investors who are purchasing homes to resell them are finding that many of the homes they are pursuing are being purchased by the investors who are looking to rent the properties. With the resellers needing to make an immediate profit as well as cover holding costs such as real estate taxes as well as selling costs and real estate commissions this investor is unable to offer such a high price for a property. This puts this investor at a distinct disadvantage.
Overall, the investor market is beginning to recover. As long as inventory for rentals remains low the investor who is looking to rent properties should continue to prosper.