Property Appreciation And Lease Option
At this point in time appreciation rates are at they're highest which means prices are high which in turn, makes it harder for 1st home buyers to afford a house which would create a good market to use the lease option technique??? Right?
AND...
Visa Versa, if decreasing appreciation + prices = increased ease to buy homes for 1st home buyers...... what technique would you now utilise? Still the lease-option technique? or maybe wholesaling? I'm stumped.....
ALSO,
with my first comment in paragraph 1, the 'cost of money' would have a great effect on whether a person can afford to buy a house, but is 'cost of money' and appreciation rates directly linked? as in... if the cost of money increased do apprecation rates + prices increase with it? or can you have unlinked situation where interest rates are high ('cost of money') and appreciation rates fall? I'm unsure of the links between these two...
Thanks in advance 
Hey ryno
It ttok me a sec to figure out what you're asking. Here's an attempt to answer / comment:
I think it's hard to directly link appreciation rate, cost of money and the status of the economy directly. You're asking, is it good to lease option when there's high appreciation of value of RE.
Well, I don't know... For me, I try to make my money on the way in. This means that you're buying properties that are under market value. Personally, for rentals, I like to see a 30-40% discount below market. I think that gives me enough room to work with, given that there are not too many repairs needed.
Whether or not appreciation is high doesn't matter, since you're getting in a property at a discount.
As far as 1st time buyers having an easy or a hard time getting in a house, I'd say that it's never been easier. There are more programs today than ever before. On top of that we've got some of the lowest rates ever. The monthly payments on a $100000 house 3-4 years ago are the same as they are on a $140000 house today.
In your second paragraph you're asking about wholesaling or leasing. Look around! I have friends who do fixer uppers, L/O's, wholesales, Subject to's and plain rentals - all at the same time! It really depends on the situation.
Real Estate is not like a regular business where there's essentially one way to make money. In RE there are hundreds of ways to make money, and you wonder where you have to start. Focus on the deal in front of you - not all of them you can flip, not all of them are good subject to's. But many properties have opportunities that can be exploited given the right method is used.
You also had a question regarding a connection between interest rate and appreciation.
Right now there are a lot of foreclosures all over the place, because of the economy. Cutting rates hasn't had the quick effect that Greenspan might have hoped for. It's taken quite a bit of time for me to feel better about the economy, and still there are many sectors that haven't been hit yet (or at least aren't done yet).
Furthermore, although interest rates nationwide tend to kind of stick close together, you'll find some cities that have a great RE market and some that don't have much appreciation at all. So are the two - appreciation / cost of money - linked? Somewhat, but there are a lot of exceptions as well.
I hope this helps somewhat.
Thanks vanrijnr, your reply help me a lot!