Homes For Rent Still Make Good Investment Real Estate
A big part of our property management training involves marketing, finding and keeping good tenants – which is a big part of investment real estate.
If you’re just getting started in investment real estate, you may not have read any property management guides, and may not even be sure that residential rental property will make a good investment going forward.
A main reason for buying investment real estate is the positive cash flow, and secondly is the appreciation. But having positive cash flow depends on there being a strong ongoing demand for rental houses.
When Investment Real Estate Was The Norm
Historically, even during serious recessions or depressions, the adage was that owning real estate was always better than not owning real estate.
Buying investment real estate for the long term has almost always been a formula for success, and much family wealth has been accumulated by buying investment real estate and keeping it in the family for generation after generation.
Real estate plus time usually equals wealth creation.
Renting Is Now The New Normal
But the times have changed.
Over the past several years nearly 6,000,000 people went from being real estate owners to real estate renters.
Translation? It’s an excellent time to own investment real estate.
New Rental Property Investors
Most of the people buying investment real estate are beginning investors. Recent surveys have show that:
59% are new to real estate investing
33.5% are considering their first investment real estate purchase
8.5% in the process of buying and selling their first investment real estate property
17% have recently made their first deal and are ready for more
36.5% have experience in more than one property transaction
It’s hard to argue with these kinds of numbers. Investment real estate rents have increased compared to the prior year. Combine this with record low interest rates and plenty of bargain priced properties on the market, and the outlook for buyers of investment real estate looks pretty good indeed.
More Renters Are On The Way
Freddie Mac recently released its U.S. Economic and Housing Market Outlook for October showing that, with rental demand rising and apartment economics improving, the multifamily sector is a strong positive signal for the U.S. housing industry.
According to the mid-2011 Census Bureau report:
An additional 1.4 million households have moved into rental housing
This represents a 4% rise in the number of tenant households in just one year
U.S. homeownership rates have fallen about 1.5% over the past year
Homeownership rates have fallen by 4.4% (to 21.9%) for those under 25 years of age and by 7% (to 34.7%) for those aged 25 to 29 years
Apartment rents, which had been flat to falling during the 2008-2009 recession, have begun to rise
This is huge opportunity for buyers of investment real estate.
5 Step House Rental eBook
Our how to rent my house guide is the perfect training tool for the beginning investment real estate buyer.
You’ll learn plenty of proven, real world tips and tricks to get your property rented fast, how to find and keep tenants that will want to keep renting from you year after year, and how to beat the competition hands down each and every time.
I hope you’ve found this article on investment real estate useful – feel free to comment or send me a note if you’ve got any questions.
Jeffrey Roark
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