Over the last few years, there has been a shift in the way many first time home owners purchase a house. Now that FHA financing is available, a customer can buy a house with as little as 0% down on the home, as long as they have a credit scores that is around or above 600. For renters with good credit, it has become more affordable to purchase a home than it is to continue renting.
From an investor’s standpoint, the rental market has been strong for some time. If we evaluate the population of renters as a whole, the new FHA financing could have an effect on the number of renters who have good credit. We may see a decrease in overly qualified renters with good credit over the next few years because a portion of them have moved onto become home owners. How will this effect your investments? Is it time to unload some your rental properties before this comes to effect your customer base?
Perhaps owning the right kind of rentals that attract paying customers will give you an advantage. Look for locations around large employers and businesses that support paying renters. Locate areas of interest where there is strong rental competition. This all plays back to the good old principle of “Location, Location, Location”. Be ahead of the curve and not behind! Its time to reevaluate your portfolio of rentals and tailor your investments to the ever changing market.