With the prospect of mortgage costs falling through 2024, the property market is beginning to experience a resurgence in interest from investors and landlords.
Investing in property has again become an attractive proposition thanks to a combination of strong returns and long-term capital gain.
Portfolio diversification, including a variety of property locations, sizes and architectural styles, is a good way to ensure consistent financial return.
Many investors look at property in terms of receiving rent to help pay the mortgage while enjoying long-term capital gain benefits.
But it is also good to remember the positive benefits that being a landlord adds to the local community. Because while property investing is worthwhile for investors, there’s an upside for tenants, too.
Easier access
As a landlord, you offer a low-barrier to entry to finding suitable living accommodation. For a tenant, this is a significant benefit compared to saving cash to qualify for a home loan.
The math
Recent research has shown renting is still cheaper than buying. The average home is worth $347,415 with a typical mortgage repayment of $1,925, up 9% since November 2022. Rents have increased 3.3% in that time. So, tenants are ahead financially.
Flexibility
The freedom to move around to find the ideal neighborhood is far greater when folks decide to rent rather than buy. Also, tenants can adapt faster if their lifestyles change, such as starting a family or facing employment troubles.
Maintenance-free
The cost, hassle and time required to maintain a property is not your tenant’s problem. This is another significant benefit that you offer as a landlord. A survey by home service company Thumbtack found property owners spend $6,400 a year to keep a property shipshape.
Cash flow
Renting means tenants don’t have to spend months or years trying to save for a deposit, and they don’t have to worry about any mis-step with their credit rating.
Market moves
In today’s market, buyers are concerned about paying too much for a property and then regretting their decision. While there is good capital gain in property in the medium to long term, this immediate worry is understandable. As a landlord, you make this risk go away for your tenants.