Now is the Perfect Time for Investing in Rentals

Investing in real estate is fruitful, but you have to be patient and willing to watch the market trends. If you’re wondering whether now is the perfect time for investing in rentals, let us help you by taking a close look at some considerations you need to make first.

Is Now a Good Time to Invest in Real Estate?

Regardless of when you’re looking at investing in real estate, there are a few pieces of information you need to take a look at first. Always be sure to check the housing market conditions that year as well as the vacancy rates.

Check Housing Market Conditions This Year

Starting with the housing market conditions, home prices rise and fall due to supply and demand. Take, for example, the housing market conditions of 2021. Currently, home prices are up by nearly 12%. This figure can be attributed to the limited inventory creating an increase in demand.

With demand so incredibly high and inventory so low, investment property prices are rising at astronomical rates. Often, buyers offer $50,000 or more over the asking price to secure the property as quickly as possible. Unfortunately for anyone looking to get into the real estate investment game right now, this also means that things are being overlooked with a waived inspection to help speed up the process.

Consider Vacancy Rates

Another significant figure to look at when considering investing in real estate is the current national vacancy rates. Looking at this year again, for example, you’ll find that the national average vacancy rate is at 2.4%. This means for prospective real estate investors that properties across the country will lie vacant approximately one week out of the entire year.

Having such a low vacancy rate is a benefit to anyone looking to invest in real estate. After all, this means that if you do leap to purchase an investment property and rent it out, you will not have to wait long before you can start collecting rent payments.

What It Takes to Buy Real Estate in 2021

There’s always a right to entry when it comes to investing in real estate, but especially so in 2021. For prospective investors, it is currently a challenging time to buy.

As already mentioned, homes are selling quickly and at much higher rates than years previously. It won’t be very easy for you to find a property that will sell under current market value, and you will have to keep coming back with a more encouraging offer as the seller doesn’t accept it repeatedly.

All things considered, these things can become discouraging for prospective investors. That’s not to say it can’t be done, though. If you do still want to begin investing in real estate, make sure you have a good idea of what type of market you are entering in 2021.

Buying an Investment Home with the Intention of Renting It

Real estate investments take many forms. You may be looking to flip a home, buy it to fix it up, and sell it quickly after, or you may be interested in earning regular income through monthly rent.

But, if you are looking at investing in real estate as a rental property, there are a few things to consider in such a competitive market as today:

  • Prices are very high
  • Returns are likely to take longer to see
  • How many rentals are currently on the market
  • Costs of a vacant property

3 Tips for Investing in Real Estate

When investing in any real estate, you must follow tips and guidelines to help increase your chances of making a savvy real estate investment.

Tip #1: Know Your Purpose

When purchasing rental properties, you must understand your purchase for investing. As you know, not all homes are built alike. Some homes can quickly and relatively easily be converted into a duplex, while others cannot. 

Furthermore, many lenders are selling distressed properties (i.e., foreclosures) in bulk; however, these homes often require significant improvements before being in good condition for renting them out to tenants. 

Therefore, the first step is to determine your purpose and, consequently, the type of property that will best meet your needs.

Tip #2: Know the Location

In addition to knowing your purpose, it is pertinent that you understand the local real estate market in which you are looking to invest. How much are people paying for rentals in the area? What are some local attractions that you can market to potential tenants?

Different markets can be exceptionally diverse, with an urban core offering several other residential areas while being surrounded by a ring of suburbs, each with its unique environment. 

When it comes to real estate, location is key—the same is true when investing in rental properties.

Tip #3: Know Your Clientele

After you have purchased the property, you will have to market it to potential tenants; therefore, it is pertinent that you know your potential customers to tailor your marketing strategies to meet their needs best. 

One of the best ways to do this is to find and hire property managers in your area who do all of this for you. Some of the tasks they can handle on your behalf may include things like:

  • Screening tenants
  • Collecting payments
  • Scheduling maintenance
  • Etc.

What makes the role of a property manager so crucial to rental property owners is that it allows you to focus your time and efforts on finding more investment opportunities.

Final Thoughts

So, if you’re debating investing in real estate, hopefully, you are willing to sit down and do your research first. Always be sure to figure out if the current market is a welcoming place for real estate investors. Then, if you do decide to move forward, ensure you know your purpose, your location, and your clientele.

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