Now is not the time to become a landlord in the U.S. or UK

Today's Financial News - Posted August 19, 2008

“All those poor old first-time buyers are being forced to rent because those mean banks won’t let them borrow enough money to buy a home. And people who do manage to sell their homes, aren’t looking to buy again until the market stops crashing. So that means that demand for rental property is rising, which should mean higher rents too.” — John Stepek

Blogger’s note: John Stepek of the UK’s MoneyWeek has noticed a sad fact about the real estate market on the other side of the Atlantic. But his observations could just as well be about any major U.S. city. We’re both having the same problem: Too much inventory, even as the number of renters is rising. According to John, what could have been a great time to be a landlord has become a catastrophe for the rental industry. Read on below to learn why.

by John Stepek

Baltimore — (TFN): The property crash is great news for buy-to-let landlords. At least, that’s what we keep hearing.

Apparently, all those poor old first-time buyers are being forced to rent because those mean banks won’t let them borrow enough money to buy a home. And people who do manage to sell their homes, aren’t looking to buy again until the market stops crashing.

So that means that demand for rental property is rising, which should mean higher rents too.

There’s just one problem. Demand for rental property might indeed be rising. But the supply of rental properties is rocketing too.

It seems that landlords shouldn’t be cheering just yet… Read on to learn why.

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