Investors across America are still enjoying a boom in rental earnings according to the latest report from the real estate brokerage, Redfin.
Average rents are just $2 a month down on the record prices that were set last year at the height of the post-Covid inflation spike when rents were rising by more than 12%.
Redfin says the average monthly rental now stands at $2,052.
While the survey noted falling rental property demand, with some landlords offering incentives to attract or retain tenants, it’s clear the rental market remains very tight by historical standards.
With one report showing only 18% of consumers think it’s a good time to buy, property investors are in a prime position to enjoy the benefits of being a landlord.
The national rental vacancy rate in Q2 was just 6.3%, up from 5.6% for the corresponding period in 2022. While this is the highest rate for two years, it is still very low by historical standards.
If you’re looking to invest in the market, this checklist may help you decide which properties to consider.
Overall aim
You want a rental property that attracts and retains responsible, reliable tenants while providing a positive return on investment.
Strategy
You need an investment strategy. Do you want profit from the rental fees, or are you seeking capital gain as the property’s value rises? Of course, it can be a mix of the two. Ensure you have your strategy straight.
Location
Proximity to amenities such as schools, public transportation, shopping centers, hospitals and employment are essential. A safe neighborhood with low crime is also important.
Quality
Avoid a property that’s not well-maintained. You don’t want to be fielding complaints and paying bills for problems with plumbing, electricity and heating and cooling systems. Addressing repair issues promptly is essential.
Appliances
Tenants really appreciate inclusions such as a dishwasher, washer and dryer and central air conditioning. If the rental market contracts, these features will still entice good quality tenants.
Security
Ensure your property has secure locks and functioning smoke detectors. Common areas should be well-lit.
NOTE: The information in this article is general in nature and provided as a market overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.