How much will your home rent for?
The recent collapse of the housing market created an interesting sub-group of Americans—accidental landlords. These people have sprung up across the country when their real estate investment didn’t work out they way that they had planned. But, there are also many people who are starting to consider themselves as accidental investors. The two groups were born from the same mother, the housing crisis, but there are very real differences between the two. The differences hinge mainly on the ability to spin a negative into a positive, and that ability can lead to great opportunities for those who can do it.
A real estate investment had long been considered a sure thing in nearly any case in the years leading up to the housing crisis. Of course, all of that changed as property values plummeted and people found themselves unable to sell their properties for the profit they were planning on. Many of these people decided to rent out their properties, either because they couldn’t sell their property or to hold onto it until the market picked up and they could sell for what they hoped for. These people are considered accidental landlords, and many of them hate their new title since being a landlord can create numerous headaches they hadn’t planned on.
On the other hand, some people are taking full advantage of the housing crisis. With home values at rock bottom, making a real estate investment is cheaper than ever. Accidental investors are those who have seen the opportunity to make cheap purchases and taken advantage of it. Perhaps they stumbled upon the chance by inheriting a home, or simply saw the opportunity and went for it. By buying now at the lowest prices, accidental investors often rent out their properties to pay the mortgage payments and wait until the market improves enough for them to make a tidy profit off their investment.
So which are you? An accidental landlord or an accidental investor? If you have a piece of property that seems impossible to sell, you may want to consider becoming an accidental landlord. Property managers can make the process easier than you can imagine for only a fraction of the rental profit. And if you have the extra cash and are willing to take a risk, making a real estate investment or two and becoming an accidental investor could pay off big down the road. Eventually, the market is expected to recover, and when it does you’ll see a nice profit.