Many of yesterday's accidental landlords are NOW investor landlords who want MORE rental property....agents who get familiar with investor properties and what are desirable rental homes to incoming renters in their area will be WINNERS
Despite rising home prices, 13 million borrowers, or 25.4 percent of all homeowners with a mortgage, still owe more on their mortgages than their homes are worth, according to a recent report by Zillow. So-called "underwater" borrowers would have to pay money into their loans to get out of their homes. Another 9 million borrowers, while not entirely underwater, likely do not have enough equity in their homes to afford to move.
The term "Accidental Landlord" came about as a result of "thinking outside the box" when it wasn't really an option to sell or maybe the owner had to move out of town to take a new job, etc.. and selling just wasn't a viable option.
While there are no real estimates of how many "accidental landlords" now inhabit the housing market, Realtors say they are one more cause of today's low inventory issue. Usually a buyer is also a seller, making the transaction a wash in terms of inventory, but if the buyer is not a seller, and instead becomes a landlord, inventory takes a negative hit.
Home prices have been rising steadily, up over ten percent from a year ago, according to the latest reading from CoreLogic. However, prices are still well below where they were during the housing boom, when so many people bought into the market.
As millions come above water, others are far below. While It will take many years of price gains for many homeowners to see the light of equity, it is great that we are on an upward track instead of the downward spiral of not too long ago.
* Excerpts taken from original article written by Diana Olick - CNBC.com
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
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