Rentlaw.com

Rentlaw.com - The National Landlord Tenant Guides August 2006.

We're winding up this quarter with a whole new group of members - landlords, tenants and the rest who are interested in real estate - either as a first time homebuyer or investor.

For those of you have read our past articles on investing in real estate, you will note that our view of the rush to invest in new development projects (condos, housing developments etc) has come to a screeching halt - leaving some investgors and more so, home builders, scrabmling to "get out".

As my dad always said - "who could afford that...".

The individual wealth in on our country, and more so, those of investors from outside the US, created this mini-run on the price of real estate around the country.

Many well intentioned development projects as well as small town communities, were "attacked" by real estate investors looking for a quikc flip. Many were succesful, but at what cost?

Those impacted were and are the poor and the middle class. The poor, forced out by rising real estate prices when investors sell out of the original investment - either brining in new investors (and higher rents), second home buyers or the first time home buyer (a good thing).

When these investors sell, many will exchange the property, called a 1031 exchange, for a new investment property - usually more expensive then the previous. This in turns creates a demand for investment properties, contributing to the rise in real estate prices.