Investing in property across America is receiving a significant boost as national rents hit all-time highs, interest rates stay at record-lows and the stock market gets jittery at a time of international crisis.
According to the website realtor.com, tenants are paying almost $200 a month more than this time last year.
Rising rents are being driven in part by folks who’ve decided to delay buying their own home and remaining a renter, keeping their options open as they watch current economic factors unfold.
This is helping to create a great long-term investment opportunity for property investors who want to build their wealth.
As a long-time agent in our neighborhood, I can identify numerous properties that offer great investment potential.
Any experienced landlord will tell you, the best rental properties are more than houses and apartments in good condition. Local amenities such as transport and schools are critical to a profitable investment property.
Below, I’ve listed some key factors to consider when searching for an investment property. If you’d like more advice on suitable options in our neighborhood, please do not hesitate to contact me. I’d be delighted to help.
Demand equation
Determine the demand for rental accommodation in the area that you’ve identified for your investment. Neighborhoods with solid employment, education opportunities and health care services usually make great locations.
Rental income
Check-out neighborhood rent levels and watch for rental properties similar to those you want to purchase. Two issues here – you don’t want to invest in an oversupplied market, and the rent must be sufficient to meet your financial obligations.
Expert advice
If you’re a little unsure about how your finances stack up, go see a financial adviser or your accountant (or both) before making any commitment.
Capital growth
Being a landlord isn’t just about counting the rent money. You want capital growth over the medium and long-term. Talk to an agent (I’d be happy to help!) about local prices trends to satisfy yourself that your property will gain value.
Do you want to be a landlord?
Dreaming of being a property investor is great, but obligations come with it. You’ll need to budget for maintenance, and you’ll occasionally have to pay for major repairs. Good tenants can be hard to find, and eventually, even the best ones leave. So be prepared for some work or hire a property management company for a percentage of the monthly rent.
Ready for commitment
Property investment is not just a financial transaction but can be a life decision. You shouldn’t flip investment properties quickly without a sophisticated strategy where you’ve thought through every detail. A long-term view of your wealth creation usually involves buying in areas where you believe capital growth will occur, keeping the property in good order and holding it for the long term.