Funny picture I saw on Facebook the other day contained this quote:
“When I die, I’m going to have the Tetris theme played at my funeral, just as my coffin is being lowered into the ground.”
After I chuckled a bit, then hit “Share” since it was a funny cultural comment, I surmised that perhaps it can be related to a phenomenon I am witnessing in real estate today and in particular people renting instead of buying.
Try to follow me here….
More people are entering the house rental market as tenants as a percentage compared to owning homes than have in the last fifteen years. Some are renting because getting a mortgage is beyond their ability right now. Some are renting because they lost their homes to foreclosure. And some are renting due to uncertainty with their jobs, overall economy, or timing in their lives.
Regardless, they are all attempting to fit their situation of needing housing (the falling Tetris piece) into the current options available in the real estate market (the blocks below already stacked).
How fast the blocks are falling is increasing in speed as the rental market keeps accelerating and changing. The blocks stacked on the bottom are getting higher with lots of gaps, too.
Here’s the Take Away folks: If you are renting, your stack of blocks is getting higher to the point that if you CAN buy a home, you probably should. Rent prices are not creeping upwards, they are skyrocketing up there to the point that owning a home is now CHEAPER than renting a home. You’re getting squeezed.
If you have ever thought about owning a rental property, now is the time to take advantage of the squeeze effect. Landlords are expected to have the upper hand on pricing power and lease terms for the next 7-10 years. Thus, juicy cash flows, low or zero vacancy periods, and manageable tenants.
Something to think about as you try to get that Tetris song out of your head the rest of today.