Rent Effects House Prices

[flip_it_fast]

I never really thought about this before but I was reading an article and it talked about how the cost of rent effects the value of a nearby house.

In recent reports, Deutsche Bank demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.

cnnmoney

During normal economic times, people were more willing to pay a little more in order to own rather than to rent. That had caused the cost to rent to stay about, the same but caused housing prices to jump a great deal. Now, lots of people have had to to turn back to renting because they can no longer afford the mortgage. Therefore, the housing market has been floodind with available houses and not nearly as many buyers which causes them to reduce the prices.

They say this trend will continue for quite some time, even though the economy has shown signs of recovery.

It's a great time to snap up houses to flip but the key is you might have to have the ability to hold off on the sale for a while in order to make a profit. Thats not an easy task because the longer you hold the house, the more you will pay in taxes and upkeep and so on.