Capital Growth & Increased Monthly Cash Flow in Possible Housing Shortage?
Real estate investors are seeing capital growth and increased monthly cash flow with the prospect of a housing shortage. With the incredibly low number of new homes being built over the past few years, the glut of inventory has been getting absorbed. If housing sales returned to normal overnight, we would run out of homes within a couple of months. For years, people have shared housing expenses while they bunked together to save money. Building slowed to a screeching halt and the current inventories of homes are now being absorbed.
Yes, it may too early to say we have a true housing shortage. But all indicators are pointing that way, so you want to look out for the markets that first experience this trend. Keep in mind one important fact: The U.S. population grows at the net rate of one new person every 11 seconds. That is about 6 people every minute, 330 people per hour and 7920 people per day and 237,600 people per month!
Add to these figures all the people who are now ready to move out on their own and get back on their feet, and you see a rapid need for housing. This is great news for real estate investors looking for cash flow. As tighter lending practices make it challenging for the average person to get a loan, these people are turning toward rentals. With an ever increasing number of people who need a place to live and a housing shortfall on the horizon, the supply of available houses continues to decline.
The simple law of supply and demand suggests that you, the real estate investor, can get maximum rents leading to much higher cash flow. All this is good news for the capital growth investor.
You all know how much I like capital growth. In fact, I believe appreciation is the number one wealth building principle in existence. It is instrumental in generating more than 70 percent of today’s millionaires. When markets are positioned at today’s low prices and we continue to absorb the inventory, housing needs will increase and investors will want to be positioned with as much property as possible can because this is the time wealth is created.
You are only limited by your own desires. The more you own, the moré wealth you will create. Investors who strike now will see capital growth and increased monthly cash flow if the predicted housing shortage becomes reality.
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