Grant Cardone: Average Rent Will Double in 10 Years — What To Do If You’re Not a Landlord
One person who can definitely call themselves an authority on money and real estate is Grant Cardone. Aside from being a businessman, author, and founder, Cardone is a real estate investor and has seen the market go through many changes in the last ten years, with the next ten years set to be much more expensive for renters, according to him.
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“There will be a correction in single-family homes when the interest rates breach 4%,” Cardone predicted in this VLAD TV YouTube video. “When interest rates come down, so will prices.”
Cardone acknowledged that currently interest rates are somewhere between 7% and 7.5%. When they come down, Cardone said that will be the first time housing sees a relief when it comes to pricing. So what does this mean if you do not own property and are renting? Maybe not the best news.
“Most people think that when interest rates go down, the prices go up because people can afford more, but that’s not true,” Cardone described, noting how about 60% of American loans are paid for upfront in cash or there is a lower price set with at least 3% of the initial down payment put upfront on the purchase. “So lots of people are trapped in a house right now.”
In Cardone’s words, “The housing market is dependent upon, not upon new buyers, first-time buyers. Existing buyers that are trading up.”
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On the flip side, when it comes to multi-family homes, Cardone had this to say: “For the next two years, rents will be flat. There will be tremendous amounts of pressure in apartments. … This is the best, most biggest, massive opportunity in my sixty-six years on this planet.”
The opportunity Cardone is referring to is the chance for real estate investors such as himself to purchase multi-family homes at a great price. In fact, Cardone mentions that he is taking advantage of the fact that multi-family homes can be purchased “for 40% and 50% below replacement costs.”
“This is the biggest real estate correction in my lifetime,” Cardone stated.
Cardone pointed out that the average rent in America is currently hovering around $1,800 per month, with this moment in time being the biggest gap in history between renting and ownership. Cardone expressed how if mortgage rates do not drop, rents have to go up. He warned that if people are unhappy with the price of rent right now to brace themselves for the next decade.
“The rents, ten years from now…the rents are going to go from an average of $1,800 to $3,000 across America,” said Cardone, which, he imagined, would have a four-to-five time return on investment for landlords.
While this may or may not come to pass, it’s important for anyone, property owners or rent payers, to do their research when it comes to buying real estate. Make sure that you are reviewing all documents carefully with an attorney and investigate the exact market of where you want to buy since it all comes down to location, location, location.
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