Hi everyone,
I'm wondering what drives rental increases within a market (e.g., Hamilton).
Why am I wondering this? Well, as a future property investor I'm noticing that, with the recent increase in house values, yields (for newly purchased properties) are (generally) down. In turn, this means that most IPs are now (pre-tax) cashflow negative.
Do rents increase (i.e., are rents increased by investors) in order to correct this. Or do investors just wear this decrease in yields? I guess most would have bought properties before the "boom" and so are not affected in the way a new investor might be.
Another way of putting my question: Is there a "rental income boom" that typically follows a property boom, and if so, is there a typical time lag between the two?
I'm looking at investing in a year or two, and am wondering whether I can expect annual rents to increase at greater than, say, inflation (assumed at 3%). What are your thoughts on the chance of this?
Looking forward to hearing your opinions,
Paul.
I'm wondering what drives rental increases within a market (e.g., Hamilton).
Why am I wondering this? Well, as a future property investor I'm noticing that, with the recent increase in house values, yields (for newly purchased properties) are (generally) down. In turn, this means that most IPs are now (pre-tax) cashflow negative.
Do rents increase (i.e., are rents increased by investors) in order to correct this. Or do investors just wear this decrease in yields? I guess most would have bought properties before the "boom" and so are not affected in the way a new investor might be.
Another way of putting my question: Is there a "rental income boom" that typically follows a property boom, and if so, is there a typical time lag between the two?
I'm looking at investing in a year or two, and am wondering whether I can expect annual rents to increase at greater than, say, inflation (assumed at 3%). What are your thoughts on the chance of this?
Looking forward to hearing your opinions,
Paul.
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