The housing crisis may not be what you think...

The Housing Crisis may not be what you think…

Rental property may be your saving grace in today’s economy. Even though home prices are falling in most of the U.S, many people are finding that it is still cheaper to rent than to purchase and renting may be an only option for some.
As we see the difficulties more prevalent in securing mortgages for that special home that someone can call their own, we come to the realization that the market has taken a turn for the better. Better you say? Yes. For the Real Estate Investor.

Many people have been forced out of their homes by foreclosure because of job loss, increase interest rate or they've sold their home during a high season with the anticipation of purchasing again. The problem is, they cannot qualify for financing or cannot afford to shell out the 10 to 20% down payment that may be required. Outside of living with friends or family, the only other option is to rent a home, condo or apartment. Therefore, the need for long-term rental properties are beginning to increase and in some markets they are actually in high demand.

There are three basics elements in life that one must have in order to survive; food, water and shelter. It has been in my experience that the typical person, after going through a foreclosure or bankruptcy, generally make the best Tenants. These are usually people that have reached a desperate point in their lives because they no longer have the shelter needed to protect their families. It is also in my experience that if given an opportunity, they will care for the property in which they are renting and will do everything in their power to make sure that the rent is paid on time. Most will not risk eviction as the chances of getting another chance from a different Landlord would be minimal.

The Playa area is a little different than that of the US. Foreclosures have not been an issue, mortgages are just becoming main-stream and there has been no time for defaulted loans. However, the cost of housing, especially near or not too far from the beach, can sometimes be a little out of the typical local person’s financial reach. Therefore they rent.

And this is what I’ve been pondering over for awhile now…
What happens when we do not have a supply of good long-term rental housing for our locals? Where do they live? What happens to the growth of the area and the economy? Yes, the economy thrives on the tourists that visit but what happens when we can no longer build and manage the resorts, open the stores, restaurants and bars for the tourists because we cannot adequately house our workers?

The Riviera Maya is experiencing much growth from industrial, transportation, as well as in industries that support the resorts and many of the tourist activities. Because of this, tourism has increased, which causes a need for additional workers on all levels of the economic spectrum. These workers need housing. They cannot live in vacation rentals. Many cannot purchase. They need housing that will accommodate their families and housing that they can call home, even if it is only for moment instead of a life-time. They need someplace that they can begin building memories, setting goals for building their futures and reaching milestones in their lives. They are not the shunned. They are the typical person. They are just like you and me.