Now is an excellent time to buy rental properties
We see a big trend in the rental market. There are many market forces coming together to create
this favorable scenario for owning rental properties.
- It is difficult for people to get loans. The lending standards have tightened dramatically
and made it much more difficult for potential homebuyers to buy a home. All of these
potential homebuyers need to live somewhere - Rental Properties.
- It is difficult for builders to get financing to develop and build new homes. New home starts are
down dramatically and as existing inventory diminishes, very few new homes are being
built.
- Real Estate is local. Real estate is based on supply and demand - in a local area. It does
not matter if there are thousands of empty homes in Florida, if your rental property
happens to be located in an area where there is an influx of people and a shortage of
rental properties. The empty houses in Florida and California are completely irrelevant.
Housing is based on local supply and demand.
Timberhawk is currently building several rental projects in Eastern Utah and Southern Idaho. The area is a hotbed for natural gas drilling and has one of the highest job growth numbers
in the country.
Eastern UT Economic Data
Vemal and Roosevelt are located in the booming Uintah Basin. The area is rich in oil and
natural gas resources and has recently experienced high growth rates-12.5% nonfarm job
increase in 2007. There is currently a lack of affordable housing and rental units. Rental units
are going for more than $1,500 per month for a simple apartment and there are few options to
buy anything for under $200,000. Projected growth in the area is very strong as the local
economy is based almost primarily on the oil and gas industry.
"Job growth is by far the most significant variable in forecasting growth." Robert Shiller, cofounder
of a home-price research company and professor of economics at Yale.
- "There will be a large influx of new workers to meet demands of a labor market stretched to its
limits." Utah Department ofWorliforce Services, December 2007 Newsletter.
- "There is a lack of labor - a situation that is further aggravated by a lack of affordable housing
and increasing infrastructure demands." Utah Department ofWorliforce Services, December
2007 Newsletter
- In 2008 Temple Mountain Energy will begin production of 150 million barrels of proven oil
reserves based on pilot project. The pilot plant, expected to be in full operation by December,
will process 100 tons of oil sands an hour. Starting next year, four production modules will
follow--one every six months, capable of processing 250 tons of oil sands per hour each, for a
full production capacity of 1,000 tons per hour. Deseret News, September 19, 2007.
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