A reminder of property as a quality investment can be found in recent research from specialist advisory company, Real Estate Witch.
It says rents are currently outpacing wages in 46 of America’s 50 largest cities – and this is not a post-Covid phenomenon.
Inflation and income growth have both lagged rent rises since 1985. While the post-pandemic rent spike appears to be slowing, Real Estate Witch says rents have risen 208% since ‘85, outpacing inflation by 40% and income by 7%.
If you invest in property across America, you’ll be keen to understand the national picture more specifically.
Some of the steepest long-term rental increases have occurred in Denver, Las Vegas, Charlotte, Seattle, Atlanta, Portland and Nashville.
Since 2009, San Jose and San Francisco – essentially, Silicon Valley – have risen 85% and 71% respectively, says Real Estate Witch.
As a local neighborhood agent, I have experience working with investors looking for properties that attract strong rental returns and offer excellent capital gains potential. If I can assist you as an investor or landlord, reach out.
In the meantime, here are some property investment tips to get you inspired.
Strategy – What are your goals? Do you want long-term rental income or short-term capital gains? Both options have risks and rewards so make sure you know your risk profile and what success will look like for you.
Homework – Target favorite areas and analyze property values, rental demand, vacancy rates, and market-influencing economic factors. Working with an experienced agent can be essential for this task.
Location – Strong rental markets need economic growth, job opportunities, and good schools and amenities. In these areas, you’ll usually find excellent tenants.
Advice – Always work with a professional financial advisor or accountant to ensure affordability and to take advantage of any tax benefits.
Finance – Work with your adviser to determine the most appropriate financing arrangements. Investigate traditional mortgages and private lenders. Compare rates, terms and fees as part of your decision-making process.
Risk – Limit risk by doubling down on property inspections, title search, zoning regulations and potential legal or environmental issues.
Diversify – Don’t put your eggs in one basket. Protect your portfolio by buying different styles of property in separate cities. That way, you won’t be exposed to a localized economic downturn.