Among the many real estate niche markets, are investment properties. These are properties that investors purchase with the intent of turning a profit through
? rental income
? remodeling and reselling otherwise known as flipping
There are many ingenious ways to produce income through real estate. Predictions are that rental properties will again become a valuable addition to the investors portfolio.

For the last three years, the cost of home purchasing has been affordable due to the historically low interest rates found across the United States. This has allowed many to move out of the rental category and into the American dream of owning a home. During this same time period, rental fees have been forced to a near standstill.

Statistics show that average home prices appreciated at a range of 8-10% annually from 2001 through 2005. Rental increases however, averaged only two to three percent. Landlords had a small pool to choose from to fill their rentals, and few risked raising rents and loosing the renter.

Though 2006 is still a strong market, (read: what bubble?), long term interest rates have started to rise. Rent increases are now predicted at 5% for 2006, realizing mostly in the low to middle end of the rental market. Due to the affordability of purchasing during the last few years, the upper end of the rental market took an especially hard hit. In the past, many people chose to rent. Now, with the shift into home ownership, the market consists mainly of lower to middle income renters.

Interestingly enough, statistics are also showing that we are in for yet another housing adjustment. The general population has been using their (supposedly) predictable home appreciation to finance their lifestyles. Across the US there are indications that this is coming to a skidding halt. With prices expected to rise on the average by only 5%, the prediction is that there will be increasing foreclosures in the next 5 years. With that, comes the opportunity for you, the real estate agent/broker, to provide a booming business in developing your investment clientele.

Your investment clients are not looking for the same type of housing that your home buyer clients are looking for. Location and price are just as important, but in different ways than the home buyer.

Selling for rental homes requires more statistical information. Whereas home buyer clients are looking to fall in love with the view or the glass tile, rental purchasers are looking for profit in the form of:
the pool of rental population
rent market prices to compare to prospective mortgage payments
condition of property to determine upkeep costs and rental price
usable square footage in the form of bedrooms directly translates to how much can be charged for rent.
functioning but not fancy appliances are a must.

This is a purchase by the numbers approach, and many will need your guidance to help them make wise decisions. The beauty of this clientele is that they generally make multiple purchases over the years, and sell their original properties to upgrade to larger properties, multi family propertiesthe list goes on.

Many people liken the investment property market to Monopoly, a strategic board game based on owning real estate.

Are you ready to play?

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