In case you’re thinking about buying your first rental or making a choice to rent out your home, owning a rental property has many benefits. Right now is a great time to invest in a rental property.
A common question among homeowners who are looking to move up is “should we sell or rent out our home?” Renting out a property can be worthwhile and rewarding. As stated in a report by Redfin, 28% of millennials plan to rent out their homes in order to move up rather than sell their home.
Here are 3 reasons why right now is the perfect time to invest in a rental property:
The Rental Market is Growing
This one is the clear cut number one reason why investing in a rental property is a great idea. California is experiencing rental hikes across the state. But that is not stopping people from renting. Earlier this year in March, The San Diego Union Tribune wrote that rent in San Diego has increased by 3% and that trend will continue to climb upward throughout 2017.
According to the U.S. Census Bureau, more than 37 percent of all Americans rent their homes, the highest percentage in decades. What’s more astounding, though, is that 59 percent of all new households created between 2010 and 2030 will rent their homes, according to Urban Institute. This shift towards renting is causing historically low vacancy rates and driving up rental prices.
Investors are salivating at the chance to increase rent and they know that with little supply and a ton of demand they can do exactly that. The growing demand for rentals will certainly increase rent prices for the next few years.
Borrowing Has Never Been Easier
During the market crash of 2007 it was tough to obtain loans for investment properties. However, in recent years, we have seen banks that were once hesitant to lend have in fact began again. If you’re in the market to buy today then this is great news for you. By leveraging loans, you minimize the amount of out-of-pocket cash that you have to put into a property. Assuming the property increases in value over time, by using other people’s money, you’ll magnify your return on invested cash.
Historically Low Interest Rates
Interest rates are extremely low. If you were thinking about borrowing money to purchase a rental property then you will be able to lock in a loan at an extremely low rate. The average interest rate for a 30-year fixed loan is approximately 3.57%
Investing in a rental property has many benefits. If you’re interested and want more information, talk to a Realty Executives Dillon agent today.