It’s a cold, hard fact of life. The suffering of one often comes simultaneously at the profit of another. So it is with rent increases, which you should be talking to your clients about, from an income property investing perspective, of course. As Jason Hartman has been saying, the real estate industry is passing through historic times right now: prices driven down by massive foreclosure numbers, low interest rates, low down payments (which is in the process of being corrected by financial and government systems).

Do income property investors need another reason to buy now? If so, here it is – rent increases. A recent CNN story recounted how rental rates have increased at an anemic (for landlords) rate of less than one percent. However, that is set to change if you listen to Rent.com executive, Peggy Alford, who claims the next four years could see rent increases by as much as 15 percent.

This is an insanely good confluence of events for those with the foresight and stash of cash to invest in properties quickly. As we said, things are already changing. In a year or so the Foreclosure Era will have changed intrinsically to the detriment of the investor. Don’t get us wrong, it’ll still be a heck of a lot better than trying to play an insider’s game from the outside like Wall Street forces you to do, but the entry fee to buy properties that profit from rent increases is already rising, especially in the area of down payments.

It wasn’t long ago that almost anyone could buy a property with five or ten percent down, max. Now the national average is up to 22 percent and federal officials are talking about codifying 25 percent. You think that’s going to change the game a little bit? We do. All the more reason to buy income properties now because, from the investor perspective, the odds will never be in your favor any more than they are right now.

And that’s why you should be talking to your clients about rent increases.

The AIPIS Team

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