[quote=livinincali]
It’s pretty obvious that single family housing is becoming a target for investment by non-traditional sources. The two biggest issues I see with that is #1 they don’t really want to be there. They’d much rather have a nice safe CD or Bonds that yields 5% but since they can’t find that return they are being forced into what is perceived to be a safe yield investment in RE. Is is safe to assume vacancy will remain low and rents will remain sticky? Probably but who knows.

The second is they lack experience being landlords. They think I’ll get a management company and collect checks in the mail every month. The problem is that landlording tends to be more complicated than that and involves actual work. Getting a 8-9% cap rate requires you to do some work to earn it.

I think the biggest key for the long term appreciation in housing is the wherewithal of all these freshly minted real estate investors. Will they stick it out until their tenants can afford to buy them out at a profit, or will they grow frustrated and liquidate.[/quote]

I agree with you here. I think some people would rather have the 5% or so bond yields and without that, I think a lot of these people buying RE might be underestimating risk and future opportunity cost. Property (short the flipping mentality) is suppose to be a long term thing anyway. But as long as people can’t do better elsewhere, I think people will just put up with it….

Rent will probably stay sticky (provided we don’t end up like Detroit) as long we have a lot of cash-poor people and getting financing for those cash-poor people is difficult…What choice do they have? Me thinks we have a lot of cash-poor people.