Rental Real Estate Demand 2018

Rental Real Estate Demand 2018

The labor shortage
is so bad right now. But what does that mean
for real estate investors? That’s today’s show. Let’s dive into it. [WHOOSH] Hey, everyone. I’m Clayton Morris, longtime
real estate investor. And I love to watch the
market trends to see where we’re going currently
in the economy and in the real estate market. Wall Street Journal
just publishing a story which I’ve been
witnessing firsthand while I’ve been out and driving
these different communities, that there is a massive
labor shortage right now. And there’s also
a massive shortage of new homes in rural areas,
those outside of city areas. And it’s really
affecting employment. So what are the numbers? Well, we’re looking at a
record low unemployment in this country right now. You think, that’s
fantastic news, right? It is. However, it’s hurting
employers, in a way, because employers simply
can’t keep up with the demand. What do I mean? Well, for instance, there is
a chair manufacturing company in Portland, Maine,
just to highlight an example, that builds chairs. Well, they can’t find the labor
in order to build the chairs. So they’re having to take out
ads, trying to recruit people to move to this smaller town. They’re having a
difficult time doing that. I also know that in
cities like Columbus, they highlight in this
Wall Street Journal piece, that the population
growth in Columbus has grown significantly
in recent years. Its labor force
grew 1.3% in 2017. And the working age
population went down. So the working age
population has actually left, but the unemployment
has also gone down. And these employers are
looking for good labor. I’ve seen this in
Indianapolis, where I do a lot of real
estate investing– one of my favorite markets. And we’ve seen all
of these employers. For instance,
Salesforce took over one of the tallest buildings
in downtown Indianapolis– the huge building,
used to be Chase Bank. Now it’s owned by a Salesforce. And the lawyer team that
I’ve been talking with from Salesforce– friend of mine– is one of their lawyers. And actually his kids go
to school with our kids. And we were talking, and
he said it’s very difficult right now for us to
even find good lawyers to work for us here in
downtown Indianapolis. So they’re having to
do recruitment efforts to bring in outside talent. And you might think,
well, who cares, right? New York City does that. People move to New
York City all the time to work for an awesome company. Yes. But these smaller
companies can’t afford those types of
recruitment incentives to get people to pick up and
move their entire family. And the biggest
problem right now is not even from the employers. It’s from the lack of housing– so the lack of new construction. All of these builders
are sitting there, saying to themselves,
should I do this? Should I build a
house right now? Because what happens
if the economy shifts? So there’s such a demand
for new construction. And these families
are saying, I’m just going to stay downtown. I’m just going to
rent right now. Or I’m going to rent
a place right now, because you don’t have any
properties for me to buy. In certain counties, there
are so few properties available that they’re even
selling before [CHUCKLES] they’re finished. I was out– and
here’s some video if you’re watching
on the video feed here on our YouTube channel. I was out recently
in Idaho, touring some of all of this
new construction that’s unfolding out there. And you wouldn’t believe– I mean, community after
community after community is just being built up. And I was with one of the
head of the project managers. And we went out at like
6:00 in the morning. We went through like 40
different properties. And they’re doing
a fantastic job. And he said that many of the
houses– almost every one of them– are sold before
they even finish them. And if they are done and
they’re sitting on the market, they’re only on the market for
like one or two weeks and then they’re sold. The demand is incredible. And the demand for rent
is equally incredible. So here’s what
I’m talking about. If you’re a real estate
investor, like me, and you buy a
rental real estate, what does this mean for you and
those B-class neighborhoods? Well, it means zero vacancy. It means very, very
low vacancy right now. In Boise, Idaho, for
instance– yes, you’re going to get a much lower
return on investment there. So you’re basically buying a
house for rent, maybe $300,000. I buy houses that are
like $60,000, $70,000. Those are my bread and
butter and what we do. But then the return on
investment is about 5%, 6%. But you’re also
seeing zero vacancy. People are staying there. Or if someone moves
out, you’re immediately getting another tenant
in the property. And that’s now what we’re
seeing across the board in a lot of the areas that we invest– very low vacancy because there
is such a demand for rent right now. If you’ve got a really nice
B-class property or a B-minus property and you’re
in one of those areas where a family needs
a place to live, you’re going to see
almost a 0% vacancy rate. And I can say that in
all the markets right now I’m currently invested in. In Michigan, in Indiana, in
Pennsylvania, North Carolina, and all these different areas
where I own rental properties, I don’t have any vacancies. And the one area that
I do is in New Jersey– [CHUCKLES] in New
Jersey, an area where you have
really high taxes. So I’ve got two evictions
happening right now on two of our New Jersey properties. We’ll get do a tenant turnover
on those, get those cleaned up. And then those will fill
right back up again as well. So nationwide you are seeing
a shortage of housing– a shortage of
available properties. So for rental investors,
this is fantastic news. But for the person looking
to buy that new construction property, I’m telling
you, even just looking in Idaho, holy smokes. Last year, these houses
were selling for $350,000. They are now selling
for $500,000. So if you are a developer or you
are in that game as a flipper– it’s a good time for you
as well to be a flipper. I’m not a flipper. But for rental real estate,
holy smokes, the price and the vacancy rate right now
just kind of across the board is looking fantastic. So there you go. And here’s another one. I’ll just give this little
tidbit before I wrap it up. Last year, a car seat
maker in Columbus, Ohio– they couldn’t find
available workers. So the general
manager of that plant said they would have had
this expansion to get 300 workers– they
couldn’t do the expansion because they just didn’t
have the skilled labor. So it is hurting some companies
that can’t keep up right now, because so many people
wanted to buy these car seats and they couldn’t
keep up with it. So really, it’s an
interesting time. I mean, heck, it’s
better than 2008 when everyone was out of a job
and everyone was panicking. Now everyone has a job,
and employers are really trying to find people with
skills to actually employ them. So it’s a total
flip in 10 years. It’s kind of strange. I’d love to hear your
comments and feedback. Are you going through
this right now? Are you an employer? Do you have employees
that you’re looking to add people to your company? Or are you looking to
buy a new home and move, but you just can’t
find the inventory? I’d love to hear your comments. You can post them here as well. And thank you so
much for subscribing. We have tons of videos
and tons of podcasts to help you out and become
financially intelligent. My name is Clayton Morris. Now, go out there. Take action. Become a real estate investor. I believe it’s the number
one way to build wealth. We’ll see you next
time, everyone.

40 thoughts on “Rental Real Estate Demand 2018

  1. First!

  2. First 😊 …. hi Morris I was waiting for you to post a video so I could ask you something,
    So I'm in the process of buying my second home right but my question is what type of mortgage should I get for it ? Should I get it as an income property or just regular second home and yes I'm planning to live in the second home and rent out my primary. Thank you in advance.

  3. Do you need a real estate license to buy and rent property?

  4. Any tips on how to choose what neighborhood to buy a rental in? Or tips on what to research. Newbie here. Great videos, very helpful!.

  5. I have missed about the last 15 properties because they are sold before I ever get to inquire about them. There is no possible way people do not have inside information. This is infuriating.

  6. Do you and your wife have to buy your own health insurance? I would like to leave my job and get into real estate investing, but I need my health insurance and it seems very expensive to buy a policy for myself and family, thanks.

  7. I have the down payment for a condo in the Tampa Bay area here in Florida. I'm kind of wondering if I should even buy or wait for the economy to crash. Everything is just so expensive… A 1/1 condo starts at like 70k unless you go to the ghettos.

  8. My wife and I bought a ranch a little over two years ago (just before we found biggerpockets and your channels😰). But with the current market where we live the house went from 170k when we bought it and now we can sell it for 200k+. We will be starting our rental portfolio in the spring of 2019 🤑

  9. I have listened to so many podcasts…maybe 50. And these videos. All great. Finally scheduled an appointment and…horrible experience. I felt like the woman was hiding things and / or did not even understand investment class she was supposed to represent. Not sure what to do.

  10. The market here in Seattle area is still very hot and I feel this is good time to buy rentals. I think this can be record high real estate boom in us.

  11. Clayton my wife and I have a meeting with your team tomorrow morning, we are finally ready to go in on our first property, and are very excited! Do you see a shortage in properties right now because of these market conditions?

  12. First of all love your vids!! So you having rental in other states is that hard to manage? I fig a property management company is doing it for you. Doing all that is that still a good profit paying 60 70 k for property? Seems like it takes so long to pay off… I live in Wv an it's so hard to find good renters seems the jobs just not here yet… so I buy the 15 to 20 k an fix up an rent out…

  13. Hey Clayton great video like always. You mention pa as one of your favorite rental market im also invested there. I focused on Reading & AllenTown, what do u think about these cities? Where in pa do you invest? If u don’t mind sharing. Thank you

  14. Do you mind me asking …how many rental properties are you up to?? And which is the best place to invest. Thank you .

  15. This is all great news! Question for you Clayton where in N.C. are you investing?

  16. Clayton, I love ALL of your videos. I have 5 doors in my local area and I'm buying a 6th in Alabama. All fill very quickly. Now, I did read about lawsuits against Morris Invest due to rehab work not being done. I spoke with a member of your team and he told me it was OdeanPointe. Is everything ok with your company?

  17. What if companies just don't find an employee who would like to work for a minimum wage? And there are plenty who would like to work for a reasonable wage?

  18. I think depend on area , my department just cut 20% people

  19. There remains millions of Millennials who still live in their parent's basements, playing video games all day while crying that they can't find jobs that are not beneath them. Their spineless parents need to push them out the door. If it comes to starving or taking one of these jobs, they'll learn to work.

  20. Hi Mr. Morris, earlier today I saw a property that seemed to be selling way lower than it should. It was $10,000 When all the other properties around it were in the $60,000 to $80,000. Is there any reason why this might be too good to be true? And do you have any advice for avoiding potential pitfalls for properties selling this low? Thanks! Love the channel.

  21. How does One buy properties from Morris if they sell out so quickly?

  22. Hi Clayton, can you tell me if your personal credit is used for the cash out refinance option on a free and clear home? Please assist, Thank you!

  23. From running the numbers on properties I've been looking at, the market doesn't seem inflated. But demand is extremely high. It's very annoying, as I'm literally just starting. I haven't bought my first property yet, and it's extremely hard to do due diligence. Basically my experience has been, finding a few houses that should theoretically give a good ROI, then looking at them, narrowing the search down to 1-2 houses, then before I can put in an offer they're already sold.

    My real-estate agent is advising me to place offers without even looking at the property. But as a first time real-estate investor, this seems scary and I don't 100% understand how the deposits on the offers work, so I want to make sure I actually want to go through with it before I make a first offer.

  24. We live in Southern California and the market is hot. Homes are selling months before they are ready.

  25. New home builders have also priced themselves out of the biggest untapped market. What I mean is that for most young families that live in flyover country simply cannot afford $200K plus homes. The cost of labor and government regulation has made it impossible for builders to profit on the entry level $100-140K house that most young families can reasonably pay for. Just my opinion. It's an opportunity for investors.

  26. Yes…I want to rent out properties as you do! Got my first taste….2 homes now in AZ very tempted to sell cause my properties are so valuable now!!!! ITs CARZY…Im not sure what to do. I have a cash flow of $700!! LOVING IT!!!

  27. Hi, thank you for these awesome videos! One thing I'm curious about is how come those blue collar workers who can afford paying $700-800 rent can't afford to BUY these 40k-50k houses?? If their credit history is so poor, aren't they risky tenants? After all, a monthly payment for a 30 years mortgage on such properties is less than the rent they pay…

  28. Which newspapers do you read relating to the economy and real estate?

  29. Our friend just sold his condo, turned out the buyer was his agents husband, inside ball all day every day.

  30. SALUTE ✊🏿

  31. I spoke to one of your agents and he has offered me a Brand New Duplex for $329,000 in an entire neighborhood of ALL rental duplexes or a house DIRECTLY across the street from a cement batch plant.  These don't really seem to be the types of properties you promote in your podcasts.  How do I get to the stuff you usually promote?

  32. Hey Clayton, once an acquaintance from Kyle's ( or Chris G's) reia group, I'm still following and watching your videos. Just moved to PA, and I know you like Indy and Columbus but what about Pittsburgh and its strong, recession proof industries – health, education, and tech? You mentioned you invest in PA, so maybe this is your city. Still learning about the neighborhoods and where to find B and C areas that fit in my preference for transit/amenity rich inner-ring areas!

  33. Do you pay for inspection or do you do your own when buying? Is it ok to buy move in ready at market value or should you always only buy if your getting a good deal?

  34. Here in the Bay Area of San Francisco, CA there are a lot of apartments for rent

  35. Would like a consultation with you guys. I tried contacting but no one gets back to me. Please email

  36. Hey Clayton

  37. Its seems throughout the real estate bubble your either paying high cost (up) or high Interest (down) on properties. When would be the best time to get a first property? Also When people are buying houses during the bubble upturn how do you keep your tenants or compete with the market? Just wanting to learn what i can before i start investing in rentals.

  38. Good video I learned a lot from watching you I have one rental property and I will get another some time

  39. 60k or 70k is not even enough for a down payment here in the Bay Area. 😂

  40. Which cities in NC do you own rental properties? I’ve been looking for that great C class neighborhood in NC. Thanks!

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